IRS Commissioner Charles Rettig told an AICPA online conference on November 17 that blanket penalty relief from late-filing and late payment penalties is “not going to happen” per a report of the session published in Tax Notes Today Federal.[1]

The AICPA had sent letters to the agency during 2020 asking for relief, the most recent being issued on November 5.[2] In the letter, the AICPA outlined the situation the organization felt called for relief:

Throughout the summer, the AICPA heard from practitioners expressing concerns about being able to complete returns by the September 15 and October 15 extended due dates because of the significant impact the Coronavirus has had on their clients and on their practices. Practitioners, and clients, are still managing remote work environments, often have had difficulty communicating with the IRS, and many are caring for sick family members or are sick themselves. Practitioners are helping small businesses with the Paycheck Protection Program applications and forgiveness, and otherwise advising small businesses on the brink of closure. Despite making every good faith effort to comply, these practitioners and taxpayers were fearful of missing the due dates. These concerns were relayed to the IRS.

Starting approximately a month after the September 15, 2020 filing deadline, many taxpayers that missed the filing and payment deadline, due to the Coronavirus, started to receive notices for failure to file penalties. We are fearful that a second wave of notices for failure to file and late payment penalties will soon be sent to taxpayers for returns that were due October 15 but were filed late as a result of the impact of the Coronavirus.[3]

The letter went on to recommend the IRS provide for the following relief:

For taxpayers that have received failure to file or late payment penalty notices, due to the monumental difficulties of the Coronavirus, the AICPA recommends the IRS create an expedited and streamlined reasonable cause penalty abatement process that eliminates the need for written requests. The IRS should offer a penalty waiver, similar to the procedures of first time abate (FTA) administrative waiver, based on the Coronavirus impacts on both the taxpayer or the practitioner. As the Coronavirus is an extraordinary event, unlike anything faced in recent history, penalty relief based on a Coronavirus impacts should not be considered first time abate. A taxpayer's eligibility for first time abate should not be impacted in future tax years even if the taxpayer was granted penalty relief due to Coronavirus impacts.

This expedited and streamlined relief should also be available through oral requests and by the practitioner, rather than requiring the request in writing.

Furthermore, it is critical that immediate guidance, such as Interim Guidance, with specific Coronavirus examples that qualify for reasonable cause is developed and provided to all telephone assistors. The examples should illustrate situations where reasonable cause relief should be granted as a result of the effects of the Coronavirus on either the taxpayer or the practitioner.

Finally, a dedicated telephone number, or a dedicated prompt within the already existing taxpayer call lines and the Practitioner Priority Service line, should be established to call and request Coronavirus-related penalty relief. To ensure that assistors are familiar with the Interim Guidance and have authority to abate or waive penalties, training should be provided to the telephone assistors.[4]

However, the Commissioner indicated that existing, case-by-case appeals, are what professionals and taxpayers will need to make use of, stating “[w]e provided as much [penalty] relief as we could.”[5]

The AICPA’s chief tax officer, Edward Karl, was quoted in the article as stating “I’m not understanding this.” The article continued outlining Mr. Karl’s reaction:

“This is not a typical year,” Karl said. “Frankly, this is not the year where I would be concerned about being a little too generous to the many taxpayers who are suffering the effects of COVID-19 . . . and the tax practitioners . . . who are trying to make everything work.”[6]

But the article concluded with the Commissioner standing by his position:

Rettig seemed determined to stick to his position. “We’re not willing to provide blanket relief that might assist people who might not have tried to pay attention to their responsibilities, as a practitioner or a taxpayer,” he told the AIPCA conference. “If you were sitting in my chair . . . you would be able to look at it as we do.”[7]

[1] William Hoffman, “Rettig to Tax Pros: Blanket Penalty Relief ‘Not Going to Happen’”, Tax Notes Today,

2020 TNTF 223-1, November 18, 2020, https://www.taxnotes.com/tax-notes-today-federal/penalties/rettig-tax-pros-blanket-penalty-relief-not-going-happen/2020/11/18/2d6y2 (retrieved November 18, 2020, subscription required)

[2] AICPA Letter, “Penalty Relief for 2019 Tax Year Filing Season,” November 5, 2020, https://www.aicpa.org/content/dam/aicpa/advocacy/tax/downloadabledocuments/aicpa-penalty-relief-letter-final.pdf (retrieved November 18, 2020)

[3] AICPA Letter, “Penalty Relief for 2019 Tax Year Filing Season,” November 5, 2020

[4] AICPA Letter, “Penalty Relief for 2019 Tax Year Filing Season,” November 5, 2020

[5] William Hoffman, “Rettig to Tax Pros: Blanket Penalty Relief ‘Not Going to Happen’”, Tax Notes Today,

2020 TNTF 223-1, November 18, 2020

[6] William Hoffman, “Rettig to Tax Pros: Blanket Penalty Relief ‘Not Going to Happen’”, Tax Notes Today,

2020 TNTF 223-1, November 18, 2020

[7] William Hoffman, “Rettig to Tax Pros: Blanket Penalty Relief ‘Not Going to Happen’”, Tax Notes Today,

2020 TNTF 223-1, November 18, 2020