Underpayment penalty calculation

[vkatranis]

Is anyone else experiencing a rash of notices where the IRS is reducing or eliminating the underpayment penalty calculated with Lacerte? I have quite a few clients and some are not happy that they paid it in when they didn't have to. Of course I called Lacerte and they said "no one else has reported any issues" but I just don't believe I'm the only one. I believe this is a calculation error in our software. 

[IRonMaN]

Same issue with ProSeries.  Sounds like the IRS is just being generous 😀

[abctax55]

Generous?  or AFU?

[Intuit_Ruben]

@IRonMaN @vkatranis  Do you have a screenshot of the notice being received? I'll take a look. Thanks! 

[BobKamman]

Are the taxpayer addresses in a federally declared disaster area?  This happened last year, also, to preparers who didn't know about the extensions or exemptions granted for making ES payments.  

[IRonMaN]

@Intuit_Ruben - I am working out of town this week so I don't have a copy of the notice handy.  It was a brief explanation saying that they corrected our incorrect calculation but it also did briefly make a mention to disaster areas, but none of my clients were located in a disaster area.  I kinda wondered if the IRS computers went rogue and are incorrectly adjusting for disaster areas that don't exist.

[BobKamman]

@IRonMaN  After June 2024 floods in Minnesota, more than 20 counties were declared eligible for federal disaster assistance.  You don't have clients in any of them? Maybe IRS figured they would just include the whole state.  

The Presidential Declaration was issued for public assistance on June 28, 2024, and was amended to include individual assistance on July 29, 2024. 

The initial declaration approved public assistance for Blue Earth, Carver, Cass, Cook, Cottonwood, Faribault, Fillmore, Freeborn, Goodhue, Jackson, Lake, Le Sueur, Murray, Nobles, Pipestone, Rice, Rock, St. Louis, Steele, Wabasha, Waseca and Watonwan counties.

The amendment made federal funding available for individual assistance and U.S. Small Business Administration loans in Blue Earth, Cook, Cottonwood, Faribault, Freeborn, Goodhue, Itasca, Jackson, Lake, Le Sueur, Mower, Nicollet, Nobles, Rice, Rock, St. Louis, Steele, Waseca and Watonwan counties.

[IRonMaN]

Good point. St Louis is a big county in Minnesota and all of my clients were high and dry but they still got the break.  I also had a client that relocated to AZ in 2023 and they also received a refund.  But I just checked and see they also were in disaster area but weren't affected so the light is now shining brighter with the refunds.