Covid-Related Late Filing Tax Penalties

Many people have experienced covid-related tax problems that could lead to Covid-Related late filing tax penalties. COVID-19 has directly or indirectly caused many people to file tax returns and/or pay their taxes late resulting in tax penalties. One issue the California Office of Tax Appeals recently ruled on was how emergency tax extensions may or may not excuse late filing and late payment tax penalties.

In response to the COVID-19 pandemic, the IRS and Franchise Tax Board (FTB) gave taxpayers extensions to file their 2020 and 2021 returns. Tax returns (and tax payments) which were normally due in April had their deadline extended. In a normal year when there are no emergencies, a taxpayer can obtain an extension until October 15th to file his or her personal tax return. The Taxpayer in the recent Office of Tax Appeals case filed her 2021 personal income tax in November, which was past the October 15th extension deadline. She argued the COVID-19 extension added additional time to the October 15th extension deadline. Unfortunately for her (and many taxpayers like her), the Office of Tax Appeals did not agree with her. The Office of Tax Appeals ruled that the COVID-19 extensions cannot be tacked on to the October 15th deadline and affirmed her Covid-related late filing tax penalties.

While we have hopefully put the COVID-19 pandemic behind us, recent flooding has led to tax deadline extensions for some California taxpayers by the IRS as well as FTB. These extensions do not tack on extra time to the October 15th extension filing deadline. While extended tax returns may be due on October 15th, this does not extend the due date for payment of taxes. Tax payments are generally due on April 15th each year. California taxpayers affected by recent flooding must still pay their personal income taxes by May 15th this year, even if they file an extension.

Questions About Late Filing Tax Penalties

If you have any questions about tax penalties and how to possibly get rid of them, contact RJS Law for a free consultation. Our experienced tax attorneys routinely assist clients in abating and reducing tax penalties. While not every taxpayer may qualify for penalty relief, there are a some legally recognized reasons to have your tax penalties waived or reduced including severe illness, a death in the family, financial hardships, bad accounting advice, and natural disasters.

Written by Joseph Cole, Esq., LL.M.

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