March 22, 2019

Following Push From Senator Gillibrand And Rep. Chu, Treasury Waves Underpayment Penalty For More Americans

Washington, DC – The Treasury Department today announced that it would waive the under-withholding penalty for taxpayers who paid at least 80% of their taxes, down from the current 85%, after Senator Kirsten Gillibrand and Rep. Judy Chu’s push. Last month, Gillibrand introduced the Taxpayer Penalty Protection Act to lower the penalty threshold to 80% had Treasury not acted. Rep. Judy Chu introduced the same legislation in the House. Gillibrand and Chu today issued the following joint statement:

“Families depend on their tax refunds each year to pay down bills, make ends meet, and save for the future. But this year, the reality for many is much different as they are shocked to discover they owe hundreds or thousands of dollars to the IRS through no fault of their own, and could even face penalties. We have been concerned about this issue since the passage of the Trump tax law. That’s why we introduced the Taxpayer Penalty Protection Act to waive this penalty for more taxpayers. Even Nina Olsen, the National Taxpayer Advocate, confirmed to the House Ways and Means Committee that the confusion created by the new tax law could lead to many taxpayers facing a penalty and urged the government to act. With tax filing season in full swing, Treasury’s action will relieve the financial anxiety facing worried taxpayers across the country. This is a win for many taxpayers across the country, and we are glad that Secretary Mnuchin responded to our call and acted in accordance with our legislation to make this change.”