Tax Tips & Calculators

IRS Offers New Penalty Relief under Fresh Start Initiative

Complete, sign and mail Form 1127-A by April 17, 2012 to ask for relief from the failure-to-pay penalty, on your Form 1040, Form 1040A, or Form 1040EZ for 2011, due to economic hardship.

The penalty relief is available to two categories of taxpayers:

• Wage earners who have been unemployed at least 30 consecutive days during 2011 or in 2012 up to the April 17, 2012 deadline for filing a federal tax return.
• Self-employed individuals who experienced a 25 percent or greater reduction in business income in 2011 due to the economy.

Other Requirements: To qualify for this relief, you must complete, sign and mail Form 1127-A by April 17, 2012. The amount you owe must be less than $50,000. The request for an extension of time to pay will result in relief from the failure-to-pay penalty for tax year 2011 only if the tax, interest and any other penalties are fully paid by Oct. 15, 2012. See the instructions included with the form for more details.

Read more about the hardship extension and download the form.