IRS grants waivers of tax underpayment penalties for more than 400,000 taxpayers. . .

In the middle of August, the IRS announced it would automatically waive the tax underpayment penalty for more than 400,000 taxpayers who have already submitted their 2018 federal income tax return and failed to claim a special penalty waiver this spring.

The waiver is only of the penalty. Any taxes that are owed must be paid.

Normally, taxpayers must pay at least 90% of the income taxes owed for a given year, or 100% of the tax liability from the prior year before filing a return, to avoid an underpayment penalty. The threshold is 110% if adjusted gross income on that year’s return exceeds $150,000.