IRS Penalty Review - Breaking News!

Summary

The transcript summarizes a financial advice podcast from host Ralph Estep, Jr. He announces IRS updates regarding automatic penalty relief for taxpayers who had balances due in 2020-2021 but did not receive notices, covering eligibility criteria, ensuring address updated to receive refunds, and options if unable to fully pay like payment plans and offers in compromise. Other key points are creating an online IRS account to access tax information, importance of resolving IRS issues before escalation to liens/levies, and sharing the podcast.

Chapters

Introducing the Ask Ralph Financial Advice Podcast

The host Ralph Estep, Jr. introduces the podcast which provides financial guidance on topics like taxes, investments and budgeting by simplifying complex issues. He promotes subscribing, leaving reviews, asking questions via the podcast webpage.

IRS Penalty Relief for Tax Years 2020-2021

The key announcement is automatic IRS penalty relief for those with tax assessments under $100k in 2020-2021 who did not receive initial balance due notices, covering eligibility criteria and no need for additional action if payments made.

Importance of Updating Address with the IRS

With penalty relief refunds possible, taxpayers must update addresses so the IRS can send notices and any refund checks successfully to avoid issues.

Options for Taxpayers Unable to Pay in Full

For those unable to fully pay tax debts, the IRS offers payment plans to pay over time, offers in compromise to potentially settle for less than owed, and temporary collection delays until finances improve.

Avoiding IRS Collection Escalation

It is crucial for taxpayers to promptly address IRS notices before matters escalate to serious collection activities like liens, levies etc. which can be avoided by taking action.

Action Items

1. Share this podcast with friends and family.
2. Visit podcast webpage www.askralfpodcast.com to leave review or question.
3. Create online IRS account to access tax information.
4. Update address with IRS if changed.
5. Explore penalty relief options under reasonable cause or first-time abatement if tax assessments over $100k.

Welcome to the Ask Ralph podcast. We're listening to an experienced financial professional can help you make sense of confusing questions current headlines and industry trends about taxes, small business, financial decision-making, investment strategies, and even the art of proper budgeting, as Ralph makes the complex simple by sharing his real-world knowledge with all things financial.

Now here's your host, Ralph Estep, Jr. Hello my friends and welcome back to another episode of the Ask Ralph show. I'm your host Ralph Estep, Jr. Today we've got some breaking news from the IRS. And what am I talking about today?

Well listen up folks. The IRS has just made an update regarding penalty relief. That's right. If you were charged a penalty during 2020 or 2021 on your tax returns, we've got some helpful information for you today.

But before we dive into that, I want to remind all of our listeners, and this is really important folks, share this podcast with your friends and family. We love spreading valuable information and would appreciate your support.

Also, don't forget to visit our podcast page at www.askralphpodcast.com where you can leave us a review or even, and I think this is cool, click on the bottom little microphone icon down at the right, and you can leave us a suggestion or a question.

Now let's get started folks. Today's episode is brought to you by Saggio Accounting Plus, your trusted partner in financial management. Ask Ralph we'll be right back. Are you tired of spending countless hours trying to navigate the complex world of accounting, taxes and financial management?

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Get your copy now at amazon.com or visit askralph.com. Start building the foundation of lasting prosperity. And now back to the podcast. All right folks, let's start with some great news for taxpayers who had a balanced due for tax year 2020 or 2021.

This is great news actually. The IRS providing automatic penalty relief. Yes, you heard me right folks, automatic penalty relief for those who did not receive balanced due reminder notices. This all has to do with the pandemic and what they call their pandemic related pause.

So, what does this mean to the average person? The IRS will automatically waive failure to pay penalties on assessed taxes of less than a hundred thousand, so $100,000 for tax years 2020 or 2021. This applies to individual taxpayers as well as businesses, estates, trusts or taxes entities who meet some certain criteria.

If you filed a form 1040, which is your normal, you know, individual tax return or other applicable forms for those years and you were assessed tax of less than $100,000. So that's a key to this. It has to be an assessment of less than $100,000, but did not receive an initial balance due notice between February 5th, 2022 and December 7th, 2023.

You are eligible for automatic failure to pay penalty relief. Here's the best part. No additional actions are required if you made payments on your account or if your balance is paid in full. The relief will be applied automatically.

If there are any other returns, what they balanced due a credit will be applied or you may even receive a refund. Now, this is amazing to me. So if you were charged one of these penalties, then and you went ahead and paid it, the IRS is actually going to either credit another tax year where you have a balanced due, or they're going to send you a refund.

So here's the key to this whole thing. You need to make sure that you update your address with the IRS if it's changed to ensure you receive the IRS notices and their refund check. Now listen, if you were one of those unfortunate people who had tax assessments of $100,000 or more, this is not gonna be automatic for you.

However, you can explore penalty relief options under the reasonable cause criteria, or the first-time abatement program. Best way to handle that is to visit somebody like me, or if you wanna do it yourself, you can go to IRS.gov/penaltyrelief for more details.

Remember that you can find details about your penalty relief by viewing your transcript. And if you have any questions regarding penalty relief, please feel free to contact the IRS after March 31st, 2024.

Now let's talk about your transcript while we're here. And this is something I recommend to all of my clients. It's really very important to go to IRS.gov and create an online account. Now they're gonna make you go through the IDME process, which can be a little cumbersome.

But once you've got it set up, it will give you access to all of your information with the IRS. So this is something that is definitely important. You can go see to make sure your returns have been filed.

You can see if there's any balances due. You can look at any kind of activity on your account. And it should be staying on the phone with them, for an hour or two hours waiting to talk to somebody. So let's talk about what happens if you're unable to pay your taxes in full.

What this penalty relief comes this whole discussion about, well, what if I can't afford to pay my taxes, Ralph? The IRS does offer several options to help taxpayers meet their obligations. Firstly, payment plans are available for those who owe, but cannot pay in full when they file their tax returns.

You don't have to wait for a tax bill. You simply apply for a payment plan at IRS.gov/payment plan. using the online payment agreement tool. You'll see this called OPA, or through the convenient text voice bots provided by the IRS.

Now I've never mess with those myself, but they say they're very useful.Another option is an offer in compromise of what we call an OIC, which allows qualifying taxpayers to settle their tax liabilities for less than a total amount.

Oh, now I've talked about this before in podcast. This is something you really need to hire a professional like myself to help you with. To determine eligibility and prepare valid OICs, use the offer in compromise pre-qualifier tool.

So, there is a tool out on their website, it's called the offer in compromise pre-qualifier tool. And you can watch helpful videos on preparing offers in compromise available on the IRS website. Now listen, I'm gonna tell you right now, I'm not telling you to do this on your own because the offer and compromise can be complicated.

So, you wanna hire a professional to help you with that. Now, if paying immediately is not feasible due to financial circumstances, taxpayers can request what's called a temporary delay of collection from the IRS until their financial condition improves.

Now, here's the thing you need to understand about that, folks, penalties and interests are going to continue to accrue until that tax is paid in full. The IRS is one of those groups where, you're going to pay them eventually and they're gonna continue to assess you with penalties and interests until they're paid.

It's crucial not to ignore notices from the IRS as unresolved tax bills can lead to serious collection activities. What do those activities look like? You don't wanna go there, but there's liens, there's levies, all kinds of things like that that they can do.

So take action promptly and explore available payment options before matters escalate further. I think we covered a lot today, but that wraps up today's episode of the Ask Ralph Show. I hope you found this information on IRS, penalty relief and payment options has been helpful to you.

And again, don't forget to share this podcast with your friends and family. And remember, visit our podcast page at www.askralphpodcast.com, where you can leave us a review or like I said, go down to the bottom right, there's a little microphone icon, click voicemail and you can leave us a question or suggestion.

This podcast is brought to you by Saggio Accounting, your trusted partner in financial management and as I always say, plan wisely for today and tomorrow and don't ignore when the IRS sends you a notice.

Thank you for joining us on the Ask Ralph podcast. And with a simple click to subscribe, we'll invite you back to our next episode. And remember, financial issues don't have to be complicated. Just Ask Ralph.

The information contained in this episode of Ask Ralph is based on data available as of the date of its release. Saggio Accounting Plus and Ask Ralph Media Inc. is under no obligation to update this content if changes occur.

Applying this information to your specific situation requires careful consideration of all facts and circumstances. And any information provided is not to be considered as financial, tax or legal advice.

Please consult your tax advisor or attorney before acting on any material covered.