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09 Sep
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I.R.S. to Refund Late-Filing Penalties for 2019 and 2020 Returns

Groups representing tax professionals, including the American Institute of Certified Public Accountants, are urging the I.R.S. to extend the deadline for the late-filing refund. While it is pleased with the “unprecedented” blanket relief, the institute said in a letter to the I.R.S., a Sept. 30 cutoff is “unreasonable” because taxpayers and preparers are busy with other tasks, including the Oct. 17 deadline for those who received extensions to file their 2021 returns.

Eric L. Smith, an I.R.S. spokesman, said the agency was aware of the extension request but had no change to report. He said the agency didn’t have an estimate of how many taxpayers might be affected by the Sept. 30 deadline. In announcing the plan in late August, Chuck Rettig, commissioner of the I.R.S., said penalty relief was a “complex issue” to administer.

Here are some questions and answers about I.R.S. relief for late-filing penalties.

The I.R.S. says that no application is necessary and that there is no need to call. If you paid the penalty, you will automatically receive a credit or a refund. Most eligible taxpayers will receive their refunds by the end of September, the agency said. But remember, you have to have filed the return by Sept. 30.

An “overwhelming majority” of filers will receive checks mailed to the address on file with the I.R.S. There is no option for direct deposit, except in “very rare” circumstances, according to Ms. Collins’s blog post.

The best way to see if relief has been applied is to create an online account at irs.gov and check your tax transcript, Ms. Collins said. That way, you can avoid long waits on I.R.S. phone lines.

Because of the large scale of the relief program, it could take time to process checks, and “speed bumps” may occur, Ms. Collins said. She advised taxpayers to be patient and to wait until after Nov. 30 before contacting the I.R.S. to ask about penalty checks.

If you have moved since last filing a tax return, you risk having your refund check “go astray,” the taxpayer advocate said. So, the advocate said, you should “lose no time” in updating your address with the I.R.S. You must call the I.R.S. on the phone or send in a form by mail. It can take up to six weeks to fully process a change of address, the I.R.S. website says. It may be faster to update your address online with the U.S. Postal Service. But you should still notify the I.R.S., the agency says, because not all post offices forward government checks.

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