The IRS May Owe You Money From COVID-Era Tax Penalties — Here’s What You Should Know

If you received IRS penalties during the pandemic years, there’s a chance you could qualify for relief, and in some cases, even a refund.

A lot of taxpayers don’t realize this because they assume once a penalty is paid, the situation is closed. But the IRS has provided penalty relief connected to the COVID era, and many people may still benefit from it.

During and after the pandemic, many individuals and business owners struggled with:

• Filing returns on time

• Paying balances owed

• Responding to IRS notices

• Keeping up with changing deadlines and requirements

As a result, the IRS issued penalties for things like:

• Late filing

• Late payment

• Failure to respond to notices

  
  

Because of the unique challenges during that period, the IRS later introduced certain forms of penalty relief.

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Who Might Qualify?

You may want to look into this if you:

• Received IRS penalties during 2020 or 2021

• Filed returns late during the pandemic years

• Paid penalties related to late filing or payment

• Still have unresolved IRS notices or balances

In some situations, the IRS automatically issued refunds or removed penalties. In others, taxpayers may still need to review their account or request relief.

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What Should You Do?

1. Review Any Old IRS Notices

If you received letters from the IRS during the pandemic years, don’t ignore them — even if you already paid.

There may be details about penalties, adjustments, or balances that are still relevant.

2. Check Your IRS Account or Tax Records

You May Want to Review:

• Penalties charged

• Payments made

• Any adjustments or credits already applied

You may discover relief was applied automatically or that additional action is needed.

3. Don’t Assume It’s Too Late

Many people assume:

“I already paid it, so there’s nothing I can do.”

That’s not always true.

Depending on the situation, there may still be opportunities to request relief or resolve issues connected to COVID-era penalties.

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The Bigger Takeaway

The IRS made a number of adjustments during and after the pandemic, and many taxpayers are still unaware of what they may qualify for.

The important thing is not to ignore old notices or assume you have no options.

A quick review now could potentially save you money or help clear up unresolved issues before next tax season.

Need Help Understanding IRS Notices or Penalties?

At In The Moment Financial Services, we help individuals and business owners better understand their tax situations and stay organized moving forward.

Sometimes a conversation can bring clarity to something that’s been sitting unresolved for years. Schedule a tax consultation today to speak with a tax professional and get all your questions answered and file (if needed).