IRS MODIFIES POLICY FOR FIRST-TIME PENALTY RELIEF

Washington, D.C. -- The Internal Revenue Service has modified its "first-time abate" policy, which provides a one-time consideration of penalty relief, based on the taxpayer's compliance history, for taxpayers who have been subjected to a first-time penalty charge.

According to the policy, the FTA penalty relief option for failure-to-file, failure-to-pay and failure-to-deposit penalties, under certain conditions, does not apply if the taxpayer has not filed all returns and paid, or arranged to pay, all tax currently due.

The FTA relief only applies to a single tax period for a taxpayer, the IRS noted.

The IRS also said that it would base any decisions on removing any future failure-to-file, failure-to-pay or failure-to-deposit penalties on any information taxpayers provide that meets reasonable cause criteria.

 

IRS E-FILE IMPROVEMENTS SHOULD HELP NEXT TAX SEASON

Washington, D.C. -- The enhancements that the Internal Revenue Service is making to its Modenized e-File computer system promise to improve the system's reliability and reduce delays in processing tax returns next filing season, according to a new report.

The report, from the Treasury Inspector General for Tax Administration, noted that during the last filing season, the IRS had to suspend MeF system processing on at least two occasions to correct system performance issues. The IRS subsequently reviewed the MeF system performance issues and identified major categories of work to address performance and reliability issues.

The IRS took the necessary steps to improve MeF performance, TIGTA found. These included testing the system's ability to process high volumes of returns for a sustained period of time. The tests concluded that the MeF system would meet peak performance requirements.

In addition, the IRS increased the bandwidth of the portal that serves as the entry point for Web-based access to IRS applications and data.

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