IRS Highlights New Business Tax Account Features, FS-2024-27
The IRS announced that it is continuing to expand the features within Business Tax Account (BTA), an online self-service tool […]
Read MoreThe IRS has provided a waiver of the penalty (referred to as addition to tax) under Code Sec. 6654 for the underpayment of estimated income tax by qualifying farmers and fishermen. Under Code Sec. 6654(i)(1), a qualifying farmer or fisherman has only one required installment payment (instead of four quarterly payments) due on January 15 of the year following the tax year if at least two-thirds of the taxpayer’s total gross income was from farming or fishing in either the tax year or the preceding tax year. For a qualifying farmer or fisherman who does not make the required estimated tax installment payment by January 15 of the year following the tax year, Code Sec. 6654(i)(1)(D) provides that the taxpayer is not subject to an addition to tax for failing to pay estimated income tax if the taxpayer files the return for the tax year and pays the full amount of tax reported on the return by March 1 of the year following the tax year.
The IRS has noted that some qualifying farmers and fishermen were unable to electronically file Form 7203, S Corporation Shareholder Stock and Debt Basis Limitations, which was required to be included in their 2021 tax returns. Due to this inability, farmers and fishermen may have had difficulty filing their 2021 tax returns electronically by the March 1, 2022 due date. Accordingly, the IRS has determined to waive certain penalties for qualifying farmers and fishermen due to these unusual circumstances.
The IRS has waived the addition to tax under Code Sec. 6654 for failure to make an estimated tax payment for the 2021 tax year for any qualifying farmer or fisherman who files a 2021 tax return and pays in full any tax due on the return by April 18, 2022, or, for taxpayers who live in Maine or Massachusetts, by April 19, 2022. The waiver will apply to any taxpayer who is a qualifying farmer or fisherman for the 2021 tax year and fulfills the conditions stated in the previous sentence. Further, the waiver will apply automatically to any taxpayer who qualifies for the waiver and does not report an addition to tax under Code Sec. 6654 on the 2021 tax return.
In addition, taxpayers who otherwise satisfy the criteria for relief under the IRS’ notice, but have already filed a return and reported an addition to tax, may request an abatement of the addition to tax by filing Form 843, Claim for Refund and Request for Abatement, due on the return by April 18, 2022, or, for taxpayers who live in Maine or Massachusetts, by April 19, 2022.
The IRS announced that it is continuing to expand the features within Business Tax Account (BTA), an online self-service tool […]
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