WASHINGTON (KNX) — The Internal Revenue Service is sending refunds to more than a million Americans who filed their taxes late in the early days of the COVID-19 pandemic.
Typically, taxpayers who file returns late without an extension can expect to pay penalties of up to 25% of the tax they owe. For 2019 and 2020, however, the agency is suspending penalties for people who filed late. In addition, the IRS said on Wednesday that taxpayers who already paid a fine would automatically receive refunds.
More than 1.6 million taxpayers will receive refunds or credits totaling $1.2 billion — an average of $750 per person, although that amount may vary. Individuals must file their tax returns to qualify for late-penalty forgiveness by September 30, 2022.
Taxpayers don't need to do anything, the IRS said. People who have been fined but not yet paid the penalty will see it erased, while those who already paid it will get a refund or a credit. According to the agency, most of the rebates will be delivered by the end of September.
The effort is a move to "help struggling taxpayers affected by the COVID-19 pandemic," according to the IRS. The plan could also help the agency, struggling to dig out from a massive backlog of unprocessed tax returns.
The pandemic has had an "unprecedented" effect on the tax agency, the IRS said in a notice, highlighting the agency's role in distributing federal stimulus payments and taking other steps to help taxpayers weather the pandemic.
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