Tax Relief Notice 2022-36: What You Should Know
CannaBlog by Calvin Shannon, President of Bridge West CPAs & Advisors to the Cannabis Industry
Recently, the IRS issued Notice 2022-36, which offers penalty relief to individuals and corporations who missed the filing deadline for particular 2019 and 2020 tax and information returns. If you are a cannabis business owner, you may want to take advantage of this tax relief.
Purpose of this Tax Relief Notice
Citing the COVID-19 pandemic, the IRS provided penalty relief for certain 2019 and 2020 returns. This penalty relief applies to businesses and individuals who failed to file their returns timely. This penalty relief will be automatic for the companies and individuals who qualify.
The penalty is typically evaluated at a rate of at least 5% every month, up to around 25% of the tax that’s not paid when a company files income tax late.
The relief applies to tax returns in some of the below forms, and more forms are listed in the notice.
- Form 1120 series
- Form 1040 (Individual’s Income Tax Return) as well as other forms in this series
Furthermore, the penalty relief report offers relief for some information return penalties.
The main objective of this penalty relief notice is to help taxpayers who have been negatively affected by the COVID-19 pandemic.
What Is the Tax Relief Notice Requirement?
To take advantage of this penalty relief, the returns for 2019 and 2020 must be filed before September 30, 2022. Otherwise, you won’t be eligible for this penalty relief.
Contact our Experienced Cannabis Tax Advisors
It might be challenging to understand how this penalty relief works. If you have any questions concerning how this penalty relief notice affects your cannabis business, please contact us and our experienced cannabis tax professionals will assist you. Bridge West CPAs & Advisors is an accounting and advisory firm solely focused on the cannabis and hemp industries since 2009. We have helped more than 600 cannabis operators across the country understand the tax issues that cannabis businesses can face and navigate local and federal accounting and regulatory challenges.