n-19-25.pdf

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Part III – Administrative, Procedural, and Miscellaneous

Relief from Addition to Tax for Underpayment of Estimated Income Tax by an Individual

Notice 2019-25

SECTION 1. PURPOSE
This notice modifies and supersedes the guidance in Notice 2019-11, which
provided for the waiver of the addition to tax under section 6654 of the Internal Revenue
Code (Code) for the underpayment of estimated income tax for certain individuals who
would otherwise be required to make tax year 2018 estimated income tax payments on
or before January 15, 2019.
This notice makes the following changes to the guidance provided in Notice
2019-11:
a. It increases the availability of the waiver of the addition to tax under
section 6654 by expanding the waiver to certain individuals whose total
withholding and estimated tax payments equal or exceed eighty percent
(reduced from eighty-five percent threshold provided in Notice 2019-11) of
the tax shown on the return for the 2018 taxable year.
b. It updates procedures for requesting the waiver of the addition to tax
under section 6654 for failure to make estimated income tax payments for

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the 2018 taxable year otherwise required to be made on or before January
15, 2019.
c. It provides procedures for taxpayers who paid additions to tax under
section 6654 for tax year 2018 but who qualify for relief under this Notice
2019-XX to request a refund of the addition to tax.
This notice provides a waiver of the addition to tax under section 6654 of the
Code for the underpayment of estimated income tax for certain individuals who would
otherwise be required to make tax year 2018 estimated income tax payments on or
before January 15, 2019. This waiver is limited to individuals whose total withholding
and estimated tax payments equal or exceed eighty percent of the tax shown on the
return for the 2018 taxable year.
SECTION 2. BACKGROUND
Generally, the Code requires taxpayers to pay federal income taxes as they earn
income. To the extent these taxes are not withheld, a taxpayer must pay estimated
income tax on a quarterly basis.
Section 6654 provides that, in the case of an individual, estimated income tax is
required to be paid in four installments and the amount of any required installment is 25
percent of the required annual payment. Generally, under section 6654(d)(1)(B), the
required annual payment is the lesser of (i) 90 percent of the tax shown on the return for
the taxable year or (ii) 100 percent of the tax shown on the taxpayer’s return for the
preceding taxable year (110 percent if the individual’s adjusted gross income on the
previous year’s return exceeded $150,000), so long as the preceding taxable year was
a full twelve months long. However, an individual may not use the tax for the preceding

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taxable year to calculate the required estimated tax payments if that taxable year was
not 12 months long, or the individual did not file a return for that preceding taxable year.
Under section 6654(d)(2), the amount of the required installment is the annualized
income installment for those taxpayers who establish that such amount is lower than 25
percent of the required annual payment determined under section 6654(d)(1). Pursuant
to section 6654(g), income taxes withheld from wages are deemed to be paid evenly
throughout the tax year, unless the taxpayer establishes the dates on which the
amounts were actually withheld. Section 6654(a) imposes an addition to tax for failure
to make a sufficient and timely payment of estimated income tax.

An individual taxpayer will not be subject to the addition to tax if an exception or
waiver provision applies. Under section 6654(e)(1), an addition to tax will not be
imposed on an individual taxpayer if the taxpayer owes less than $1,000 in tax, after
subtracting tax withheld on wages. Under section 6654(e)(2), an individual will not be
subject to an addition to tax if the individual did not have any tax liability for the previous
year, the preceding taxable year was 12 months, and the individual was a citizen or
resident of the United States throughout the preceding tax year. In addition, the
Secretary is authorized by section 6654(e)(3)(A) to waive the addition to tax if he
“determines that by reason of casualty, disaster, or other unusual circumstances the
imposition of such addition to tax would be against equity and good conscience.”
The December 22, 2017, enactment of Public Law 115-97, commonly referred to
as the “Tax Cuts and Jobs Act” or “TCJA,” included a broad array of changes to the
Code affecting millions of individual taxpayers. On February 28, 2018, the Internal
Revenue Service (IRS) released an updated Withholding Calculator on IRS.gov and a

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new version of Form W-4 to help individual taxpayers determine their appropriate
amount of 2018 tax withholding. Despite the release of the updated Withholding
Calculator and new Form W-4, some individual taxpayers may have been unable to
accurately calculate the amount of their required estimated income tax payments for the
2018 tax year. Accordingly, the IRS is providing additional relief to individual taxpayers
by waiving certain penalties if the requirements set forth in section 3 of this notice are
satisfied.
SECTION 3. WAIVER FOR UNDERPAYMENT OF ESTIMATED INCOME TAX
Pursuant to the authority in section 6654(e)(3)(A), the addition to tax under
section 6654 for failure to make estimated income tax payments for the 2018 taxable
year otherwise required to be made on or before January 15, 2019, is waived for any
individual whose total withholding and estimated tax payments made on or before
January 15, 2019, equal or exceed eighty percent of the tax shown on that individual’s
return for the 2018 taxable year.
To request this waiver, an individual must file Form 2210, Underpayment of
Estimated Tax by Individuals, Estates, and Trusts, with his or her 2018 income tax
return. The form can be filed with a return filed electronically or on paper. Taxpayers
should complete Part I of Form 2210 and the worksheet included in the form instructions
to determine if the waiver in this notice applies. If the waiver applies, check the waiver
box (Part II, Box A), include the statement “80% Waiver” next to Box A, and file page 1
of Form 2210 with the return. Forms, instructions, and other tax assistance are
available on IRS.gov. The IRS toll-free number for general tax questions is 1-800-829-

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1040. This waiver is in addition to any other exception that section 6654 provides to the
underpayment of estimated income tax.
SECTION 4. CLAIMING REFUND OF AMOUNTS PAID AS ADDITIONS TO TAX
Taxpayers who qualify for relief under Notice 2019-25 may have already paid
additions to tax under section 6654 for tax year 2018. If the waiver under this notice
applies to a taxpayer and the taxpayer has already paid additions to tax under section
6654 for the 2018 tax year, to claim a refund of the additions to tax under section 6654
for the 2018 tax year, the taxpayer should file Form 843, Claim for Refund and Request
for Abatement. Taxpayers should complete the form and include the statement “80%
Waiver of estimated tax penalty” on Line 7.
SECTION 5. IF WAIVER DOES NOT APPLY
If neither the waiver provided by this notice nor any other exception applies to an
individual taxpayer, the amount of any addition to tax is determined by applying the
underpayment interest rate established under section 6621 of the Code to each
required installment of estimated tax that was underpaid for the period that the
installment is underpaid. The period of the underpayment runs from the due date for
the installment to the earlier of April 15, 2019, or the date on which the underpayment is
paid. This notice has no effect on determining the amount of each required installment
for an individual whose total withholding and estimated tax payments do not equal or
exceed eighty percent of the tax shown on that individual’s return for the 2018 taxable
year.
SECTION 6. EFFECT ON OTHER DOCUMENTS
Notice 2019-11 is modified and superseded.

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SECTION 7. CONTACT INFORMATION
The principal author of this notice is Michael A. Franklin of the Office of the
Associate Chief Counsel (Procedure and Administration). For further information,
please contact Mr. Franklin at (202) 317-6844 (not a toll-free number).