Economic impact payments: What you need to know

Check for the latest information: No action needed by most people at this time

Updated with new information for seniors, retirees on April 1, 2022. Also see Treasury news release.

WASHINGTON — The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment.

Dear IRS, My Tax Mistake Was Not Willful, No Penalty?

Many people assume that the IRS will not impose penalties if you weren’t actually trying to cheat on your taxes. After all, taxes are complex, and mistakes happen. But the burden is on you to show that you acted reasonably. Relying on professional tax advice can be one way. If you can’t convince the IRS, you will probably end up with penalties. The size of penalties varies, but they are often around 25%. Higher penalties and even criminal prosecution are possible in some cases. You might even have to prove you are right or that your mistakes were innocent. If the IRS believes you were trying to cheat, you could face a civil penalty of 75% or even criminal prosecution. And remember, most criminal tax cases start with civil audits.