October 31, 2022 12:44 am

Automatic Penalty Relief

The IRS announced in late August 2022 that it is providing relief from failure-to-file penalties for tax years 2019 and 2020 for returns (Form 1040 or 1040-SR) filed by September 30, 2022 (Notice 2022-36). No action is required for this relief. Anyone who already paid a penalty will receive a refund. The penalty relief does not apply to any penalty settled in a closing agreement or finally determined in a judicial proceeding.

Tax Glossary

Investment in the contract

The total cost investment in an annuity. When annuity payments are made, the portion allocable to the cost investment is tax free.

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