IRS will reimburse 1.6 million taxpayers who missed the deadline to file their taxes.

More than a million Americans who submitted their taxes late during the early stages of the COVID-19 outbreak are receiving refunds from the Internal Revenue Service.

Taxpayers who submit their returns after the deadline without requesting an extension frequently face fines of up to 25% of their unpaid taxes. However, the organization is stopping the fines for late filers in 2019 and 2020. The IRS announced on Wednesday that it will automatically issue refunds to taxpayers who have already paid a fine.

Over 1.6 million taxpayers are anticipated to get refunds or credits totaling $1.2 billion, or, on average, $750 each. However, some taxpayers may receive more or less. Individual tax returns must be filed by September 30, 2022, to be eligible for late-penalty forgiveness.

According to the IRS, taxpayers don’t need to take any action. While individuals who already paid a penalty will receive a refund or credit, those who have been penalized but haven’t yet paid the penalty will have it removed. According to the agency, the majority of the refunds will be sent out by the end of September.

According to the IRS, the initiative aims to “assist struggling taxpayers afflicted by the COVID-19 outbreak.” The department, which is now working to clear a significant backlog of unprocessed tax returns, could benefit from the strategy as well.

The IRS stated in a notification that the epidemic has had a “unprecedented” impact on the tax agency, underlining the agency’s role in distributing government stimulus monies and taking other measures to assist taxpayers in surviving the pandemic.

The IRS may gain from the elimination of late filing fines by being able to concentrate on reducing its backlog of tax-related material and getting back to business as usual in time for the 2023 tax season.

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