IRS Commissioner Meets with Tax Professionals
House Passes IRS Reform Legislation

Penalty Waivers for Underpayment of Tax

In Notice 2019-25, the IRS expands its penalty waiver for underpayment of 2018 withholdings and estimated tax payments if those payments equaled at least 80 percent of the tax due upon filing the federal return. In prior Notice 2019-11, the penalty was waived only if at least 85 percent of the tax was paid prior to filing.

Any taxpayer eligible for the additional relief who has already filed his/her return can claim a refund of the penalty amount by filing Form 843 and completing Line 7 with the statement, “80% waiver of estimated tax penalty.”

Late February, “qualified” farmers and fishermen also received an underpayment penalty waiver. Prior to Notice 2019-17, these taxpayers were required to make one estimated installment payment by Jan. 15 of the year following the taxable year or file their return by March 1. The notice waives the underpayment penalty for these businesses if they file their 2018 tax return and pay the full amount due by April 15.

https://www.irs.gov/pub/irs-drop/n-19-25.pdf

https://www.irs.gov/pub/irs-drop/n-19-17.pdf

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