IRS to Waive Tax Penalty

The Internal Revenue Service announced that it will waive tax underpayment penalties this year for persons on Social Security who failed to take their benefits into account when making quarterly payments to Uncle Sam. The IRS said it is waiving the penalties because many Social Security recipients may not have been aware of new tax provisions involving Social Security benefits. Generally, half of Social Security benefits are taxable for single persons who earn more than $25,000 and couples who earn more than $32,000 a year. However, the agency said the waiver will cover only 1984. Social Security recipients will have to include the taxable portion of their benefits in estimated quarterly payments made for 1985.