The IRS will waive $1 billion in penalties for people and firms owing back taxes for 2020 or 2021

The IRS said Tuesday it is going to waive penalty fees for people who failed to pay back taxes that total less than $100,000 per year for tax years 2020 and 2021.

Nearly 5 million people, businesses and tax-exempt organizations — most making under $400,000 per year — will be eligible for the relief starting this week, which totals about $1 billion, the agency said.

The IRS temporarily suspended mailing automated reminders to pay overdue tax bills during the pandemic, beginning in February 2022, and agency leadership says the pause in automated reminders is a reason behind the decision to forgive the failure-to-pay penalties.