IRS WAIVES PENALTIES FOR FARMERS FISHERMEN
IRS waives penalties for farmers fishermen. In IRS Revenue Notice 2022-13, the IRS issued a memorandum on granting a waiver of estimated tax penalties to qualifying farmers and fishermen, prompted by the inability of some of them to e-file the new Form 7203, S Corporation Shareholder Stock and Debt Basis Limitations., by March 1st. The IRS said it was aware of third party software issues affecting qualifying farmers and fishermen trying to e-file From 7203 with their return. IRS waives penalties for farmers fishermen.
Individual taxpayers whose current year taxes are not withheld from wages or other sources generally must pay estimated taxes quarterly or be liable for an additional tax, or penalty, under Section 6654(a). However, Sec. 6654(i) provides a special rule for qualifying farmers and fishermen. They may pay a single estimated tax installment for the tax year by Jan. 15th of the following tax year. They may also avoid any addition to tax under Sec. 6654(a) by filing their return and paying the full tax liability by March 1st of the following year.
And while other taxpayers estimated IRS tax payments must total at least 90% of their actual tax liability for the tax year to avoid penalties, for farmers and fishermen, the actual tax liability requirement is 66.67% of their actual liability instead of 90%. A qualifying farmer or fishermen is one whose gross income from farming or fishing in the tax year or preceding year is at least two-thirds of total gross income from all sources.
For those that miss these deadlines and incur significant taxes, farmers and fishermen can contact a good Tax Resolution Services firm for Tax Relief options. If the debt is large enough, the option might include the IRS Fresh Start Program. These options are best discussed with a qualified Tax Professional who specializes in this area of taxation.