Taxpayer Penalty Protection Act of 2021

Bill 117 HR 5155, also known as the Taxpayer Penalty Protection Act of 2021, aims to protect taxpayers from certain penalties imposed by the Internal Revenue Service (IRS). The bill specifically targets penalties related to the failure to file tax returns, failure to pay taxes, and failure to deposit certain taxes.

Under this legislation, taxpayers who have a clean compliance history for the past three years would be eligible for penalty relief. This means that if a taxpayer has not incurred any penalties for failing to file tax returns, pay taxes, or deposit taxes in the past three years, they would not be subject to penalties for these offenses in the future.

The bill also includes provisions for taxpayers who have been penalized in the past but have since demonstrated compliance. These taxpayers would be able to request penalty abatement from the IRS, provided they meet certain criteria outlined in the legislation. Overall, the Taxpayer Penalty Protection Act of 2021 seeks to provide relief to taxpayers who have made honest mistakes or faced unforeseen circumstances that led to penalties imposed by the IRS. By offering penalty protection to compliant taxpayers and a pathway to abatement for those who have since corrected their mistakes, this bill aims to promote fairness and accountability in the tax system.