IRS: Some Taxpayers Eligible for New Penalty Waiver

Major changes to the U.S. tax code that went into effect last year will affect most taxpayers, according to the IRS. While most will get a refund for 2018, others may find they owe taxes.

“The IRS understands there were many changes that affected people last year, and the new penalty waiver will help taxpayers who inadvertently had too little tax withheld,” said IRS Commissioner Chuck Rettig. “We encourage people to check their withholding again this year to make sure they have the right amount of tax withheld for 2019.”

According to the iRS, many of those who owe may qualify for a waiver of the estimated tax penalty that normally applies.

Taxpayers with a filing requirement and a balance due are encouraged to file by the April 15 deadline even if they cannot pay in full. Taxpayers are urged to pay what they can and consider a payment plan for the remaining balance. The IRS offers a variety of flexible payment options to those who owe.

Taxpayers who owe taxes can choose among the following payment options:

• IRS Direct Pay allows payment directly from a checking or savings account. This service is free.
• Electronic Federal Tax Payment System, or EFTPS. Pay by phone or online. This service is free.
• Debit or credit card payment. This service is free, but the processing company may charge a fee. Fees vary by company.
• Check or money order made payable to the United States Treasury (or U.S. Treasury) either in person or through the mail.
• Cash payments at some IRS offices or at a participating PayNearMe location. Some restrictions apply. Taxpayers should not send cash through the mail.

Several payment options are available for taxpayers who are unable to pay their taxes including:

• Online Payment Agreement — Individuals who owe $50,000 or less in combined income tax, penalties and interest and businesses that owe $25,000 or less in payroll tax and have filed all tax returns may qualify for an Online Payment Agreement. Most taxpayers qualify for this option, and an agreement can usually be set up in a matter of minutes. Online applications to establish tax payment plans, like online payment agreements and installment agreements, are available Monday – Friday, 6 a.m. to 12:30 a.m.; Saturday, 6 a.m. to 10 p.m.; Sunday, 6 p.m. to midnight. All times are Eastern time.
• Installment Agreement — Installment agreements paid by direct deposit from a bank account or a payroll deduction will help taxpayers avoid default on their agreements. It also reduces the burden of mailing payments and saves postage costs. Even taxpayers who don’t qualify for a payment agreement may still pay by installment. Certain fees apply.
• Delaying Collection — If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer’s financial condition improves.
• Offer in Compromise — Certain taxpayers qualify to settle their tax bill for less than the amount they owe by submitting an offer in compromise. To help determine eligibility, use the Offer in Compromise  Pre-Qualifier tool.

In addition, taxpayers may consider getting a loan to pay any balance owed. In many cases, loan costs may be lower than the combination of interest and penalties the IRS must charge under federal law.

Taxpayers can go to IRS.gov/account to securely access information about their federal tax account. They can view the amount they owe, pay online or set up an online payment agreement; access their tax records online; review the past 18 months of payment history; and view key tax return information for the current year as filed. Visit www.IRS.gov/secureaccess to review the required identity authentication process.