Section 1 Short title
This Act may be cited as the “Simplify Automatic Filing Extensions Act” or the “SAFE Act”.
Simplify Automatic Filing Extensions Act
A BILL
To amend the Internal Revenue Code of 1986 to allow individuals to avoid a penalty for failure to pay income tax by timely paying 125 percent of the income tax liability for the prior year.
Sec. 2 No penalty for failure to pay income tax for individuals who timely pay 125 percent of income tax liability for prior year
In general— Section 6651(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(3) No penalty for failure to pay income tax for individuals who timely pay 125 percent of income tax liability for prior year
“(A) In general—Subsection (a)(2) shall not apply with respect to an income tax return of an individual if such individual pays, on or before the date prescribed for the payment of the tax with respect to which such return relates (determined with regard to any extension of time for payment), 125 percent of the amount of tax required to be shown on the income tax return of such individual for the immediately preceding taxable year.
“(B) Failure to file; short taxable years—If the individual did not file an income tax return for the immediately preceding taxable year referred to in subparagraph (A), or if such taxable year was less than 12 months, subparagraph (A) shall not apply.
“(C) Joint returns—In the case of a joint return, if the taxpayer did not file a joint return for the immediately preceding taxable year referred to in subparagraph (A), the amounts required to be shown on the income tax returns of both spouses for such immediately preceding taxable year shall be taken into account under subparagraph (A). Except as otherwise provided by the Secretary, if the individual does not file a joint return for the taxable year to which subparagraph (A) applies and filed a joint return for the immediately preceding taxable year, the entire amount of tax required to be shown on such joint return shall be taken into account under subparagraph (A).
“(D) Exception not applicable in certain cases of increased penalty—Subparagraph (A) shall not apply with respect to any period beginning after the day described in subsection (d)(2).”
Conforming amendment— The heading of section 6651(c) of such Code is amended by striking “Rule” and inserting “Rules”.
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2022.