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IRS Grants Penalty Relief to Nearly 5M Taxpayers
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Subscribe28 JAN 2026 / IRS UPDATES
The IRS provided nearly $1 billion in penalty relief to approximately 4.9 million taxpayers who failed to pay their debts during the tax agency's pandemic pause. Due to overwhelmed phone lines, staffing shortages, and processing backlogs, the IRS stopped sending automated collection notifications in 2022, which continued accruing penalties and ended up significantly increasing taxpayers' balance amounts, necessitating the relief that was announced in 2023.
When the IRS paused automated collection notices during the pandemic, it felt a bit like the opening act of The Godfather. A sudden calm. Letters stopped arriving. Phones went quiet. Everyone sensed something was still happening off screen, just not when...
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