FILE - In this Jan. 10, 2017 file photo, A 1040 tax form appears on display in New York. The Treasury Department is expanding for a second time this year the relief it grants taxpayers who had too little in income taxes withheld from their paychecks in the first year of a sweeping tax overhaul. Treasury announced Friday, March 22, 2019 that taxpayers will be able to avoid penalties for paying too little in taxes as long as they paid at least 80 percent of what they owed the government. (AP Photo/Mark Lennihan, File )

Treasury grants further relief on IRS withholding penalties

March 22, 2019 - 12:13 pm

WASHINGTON (AP) — The Treasury Department announced Friday that it is expanding again the relief it grants taxpayers who had too little in income taxes withheld from their paychecks in the first year of a sweeping tax overhaul.

Treasury said that taxpayers will be able to avoid penalties for paying too little in taxes as long as they paid at least 80 percent of what they owed the government.

That represents a reduction from the regular threshold to avoid penalties of paying 90 percent of what is owed. Treasury had earlier this year reduced the normal 90 percent threshold to 85 percent.

In a statement, Treasury Secretary Steven Mnuchin said his department was making the move "to help those who attempted in good faith to meet their withholding obligations."

Mnuchin had been urged by a number of lawmakers during appearances before Congress last week to make the move.

Before this filing season, taxpayers could avoid penalties for underpayment if they had paid 90 percent of the taxes owed for the current year. In January, the IRS lowered that 90 percent threshold to 85 percent in an effort to deal with issues raised by the transition to the tax cut law approved by Congress in December 2017.

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