Level 4

Question

Remove IRS interest and penalties

Forum|Forum|2 years ago
July 29, 2024
21 replies
99 views

I efiled my client's return in February. He paid the IRS and mailed it in on April 15. It was a Cashier's check. The IRS did not cash it until May 8. They are hitting him with interest and penalties. In his mind, since it was a Cashier's check, then the bank had already taken the money out of his account. He wrote the IRS a letter explaining the above. He has no proof of the date he mailed the check to the IRS. I explained that without proof of date of mailing, the IRS would most likely deny his request to remove interest and penalties. Does anyone have any suggestions or ideas that might help my client?

ProSeries Professional

This topic has been closed for replies.

abctax55

Level 15

How much is the interest and penalty for the 23 days?

HumanKind... Be Both

J

jamessiteAuthor

Level 4

He owed about $81000 but NO 2210 penalty. He was charged about $850 in interest and penalties

IRonMaN

Level 15

He got the cashier's check and sat on it a while before he mailed it? Otherwise wouldn't the date it cleared the bank be roughly when he mailed it? Are you sure he didn't sit on it and mail it after April 15th?

Slava Ukraini!

T

TaxGuyBill

I think the IRS scans all envelopes that they receive. That means if there was a postmark on the envelope, the IRS should have a scan of it buried in their computer somewhere.

He can try calling the IRS to find someone who is willing to look up that scan, but my guess is that it won't be easy to find somebody that is willing and able to do it. It sounds like about $900 of work to get rid of $850 of penalties and interest.

rbynaker

Level 13

@TaxGuyBill wrote:

I think the IRS scans all envelopes that they receive. That means if there was a postmark on the envelope, the IRS should have a scan of it buried in their computer somewhere.

That's my understanding as well. But the IRS' "go to" response seems to always be "send in proof of mailing." Which then inevitably gets lost and has to be sent again a couple more times and eventually escalated to TAS.

Since you don't have proof of mailing I would say this is an expensive lesson for the taxpayer to next time either pay electronically or pay the upcharge for certified mail. Sometimes reaching out to a representative in Congress can get things moving (but again without proof of mailing . . .)

I have seen reports on other lists about S Corp extensions (paper filed) getting posted with the "received" date instead of the "postmarked" date. That seems to be a systemic problem that's popped up at the IRS this year. This was brought up earlier this month at our regional Stakeholder Liaison Teams meeting so they're going to run it up the flag pole.

Rick

J

judys3

Level 6

The issue I see with this is the fact you E-filed the return in February and the client didn't pay until April 15th. It would be from the date the return was filed not the date he got the cashiers check and then decided to hold. For that amount of money he would have needed to pay ES Payments

sjrcpa

Level 15

Even if you file in February, the tax is due April 15.

The more I know the more I don’t know.

Accountant-Man

Level 13

Since he admitted that the certified check meant that the bank already removed the money from his account, what was the point of holding onto the check until April 15? Keeping it from the government?

Pay the $850. Maybe you can get the penalty removed.

** I am "Elevating with Intention!"

D

David Stone

Level 3

If the IRS does not grant the penalty request for reasonable cause, you can ask for a First Time Abatement (FTA). If your client has not had any penalties for the past three years, he will qualify for this. Either call the Practitioner Hotline or send a letter (don't forget to charge)

sjrcpa

Level 15

Maybe the get out of jail free card should be reserved for a potentially larger item. Client is high income/high tax.

The more I know the more I don’t know.

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