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Individual Tax

Treasury Secretary indicates that more tax relief possible

Thomson Reuters Tax & Accounting  

· 1 minute read

Thomson Reuters Tax & Accounting  

· 1 minute read

Treasury Secretary Steven Mnuchin has stated that the Trump administration is considering additional tax penalty relief for taxpayers who failed to adequately withhold for 2018.

Prompted by changes in the Tax Cuts and Jobs Act (TCJA; P.L. 115-97, 12/22/2017), IRS released Notice 2019-11 in January 2019, in which it waived the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year. IRS indicated that it was generally waiving the penalty for any taxpayer who paid at least 85% of their total tax liability during the year through federal income tax withholding and/or quarterly estimated tax payments. Under Code Sec. 6654 the usual percentage for penalty relief is 90%.

In response to a question by Representative Kenny Marchant (R-TX), Mnuchin stated that lowering the percentage to 80% was a option that could be considered. Mnuchin said that a decision on any penalty relief would likely be made by next week.

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