According to Decrypt, the Internal Revenue Service (IRS) has announced that it will waive standard penalties for more than 4.7 million taxpayers who failed to pay taxes for 2020 or 2021. It is estimated that the move will result in a savings of $1 billion for taxpayers. Many cryptocurrency users who have yet to declare their cryptocurrency income for this period can now pay taxes on their gains while avoiding significant late penalties.
The penalty exemption primarily applies to individuals earning less than $100,000 in 2020 or 2021, though it will also apply to those with higher incomes. The IRS will send letters to eligible taxpayers during the current month notifying them of their inclusion in this programme. The penalty exemption will be applied automatically, and eligible taxpayers who have already paid late penalties for the relevant years will be refunded the full amount of those fees.
However, it is worth noting that this programme will only be in place until the end of March, after which time the US IRS monthly late fees will once again be applied to all taxpayers. This move by the IRS is intended to ease the tax burden on those who find it difficult to pay their taxes and may support greater social participation in the tax process.
