Woman died in 2017. Son/Executor makes an $7,000 extension payment for her 2017 return on April 15, 2018.

Return filed November 5, 2021. Tax on return $4,000. Overpayment $3,000. I don't know why it was filed late. I picked this up when another employee left.

PA has been sending notices asking for $4,000 plus interest and penalty. I'm thinking they did not credit the extension payment. I get the cancelled check, a POA and finally get someone at PA Dept of Revenue to talk to me.

He said the extension payment was "removed/written off" in May 2021 since it had been 3 years. He said the client does owe the $4K plus the interst and penalty. I can petition the Board of Appeals to get rid of the penalty.

Can this be right? The payment just goes poof? I understand about not getting a refund after 3 years, but I don't understand not getting any credit for the payment.

@PATAX  

@Accountant-Man