Relevant Implications For Taxpayers With International Assets/Accounts.
The IRS has just released Notice 2022-36 which provides an automatic relief (the “relief”) for certain tax returns for 2019 and 2020. This means that if a taxpayer qualifies for the relief, the specified penalties will be abated in full and, when the penalties have already been paid, the IRS will issue a refund.
To properly understand the scope of the relief, it must be noted that only returns for 2019 and 2020 qualify for relief. Second, the returns must have to be filed by September 30, 2022. In other words, if the respective returns for 2019 and 2020 have not yet been filed, a taxpayer has until September 30, 2022 to submit those returns and still qualify for relief.
Third, the following returns qualify for the relief:
| Series/Type of return | Tax Form | Type of penalty abated |
| 1040, Individual Tax Returns | 1040, 1040-NR, 1040 (PR), 1040-SR, 1040-SS | Failure to File (FTF) |
| 1041, Tax Returns for Estates and Trusts | 1041, 1041-N | FTF |
| 1120, Tax Returns for Corporations | 1120, 1120-C, 1120-S, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF | FTF |
| Return for Real Estate Mortgage Investment Conduit | 1066 | |
| Return for Private Foundations/ Exempt Organizations | 990-PF, 990-T | |
| Information Return Of U.S. Persons With Respect To Certain Foreign Corporations | 5471 | FTF – $10,000 USD per form not filed |
| Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business | 5472 | FTF – $25,000 USD per form not filed |
| Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts | 3520/3520-A | FTF – For foreign trusts, 35% of value of trust/property transferred to trust.
For foreign gifts, 5% of gift value up to a maximum of 25% penalty |
| Tax Return for Partnerships | 1065 | FTF |
| Information returns | 1099 (all types) 1042, W-2 | FTF. In this particular case, the information return must have an original due date of January 31, 2020, February 28, 2020 or March 31, 2020 (For 2019) and same periods for 2021 (for 2020) |
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