Farmers and Fishermen Underpayment of Estimated Tax

Cross References
• Notice 2022-13

To the extent that federal income taxes are not withheld from wages or other sources, a taxpayer must pay estimated income taxes on a quarterly basis. Under a special rule, a qualifying farmer or fisherman has only one required installment payment (instead of four quarterly payments) that is due on January 15 of the year following the tax year. A qualifying farmer or fisherman is a taxpayer who receives at least two-thirds of total gross income from farming or fishing in either the tax year or the preceding tax year. If a qualifying farmer or fisherman does not make the required estimated tax payment by January 15, the taxpayer can still avoid the underpayment of estimated tax penalty by filing and paying the full amount of tax due by March 1 of the year following the tax year.

Under Notice 2022-13, the underpayment of estimated tax penalty is waived for any qualifying farmer or fisherman who files a 2021 tax return and pays in full any tax due by April 18, 2022, or, for those taxpayers who live in Maine or Massachusetts, by April 19, 2022. The waiver will apply automatically to any taxpayer who qualifies and does not report an underpayment penalty on the tax return. If a taxpayer has already filed a return and reported the penalty on that return, the taxpayer may request an abatement by filing Form 843, Claim for Refund and Request for Abatement, in accordance with the instructions for Form 843 and as follows:
• Write “Request for Relief under Notice 2022-13” at the top of Form 843.
• Enter “6654” on line 4.
• Check the third box on line 5a.
• On line 5b, show the dates of any payment of tax liability and addition to tax under IRC section 6654 for the tax period involved.
• On line 7, state why the taxpayer’s circumstances satisfy the criteria for relief under Notice 2022-13. Generally, this would include the status of the taxpayer as a qualifying farmer or fisherman, filing a 2021 tax return and paying in full any tax due on the return by April 18, 2022, or, for those taxpayers who live in Maine or Massachusetts, by April 19, 2022.