The Internal Revenue Service (IRS) has come under scrutiny for sending millions of letters demanding tax payments with inaccurate information.
IRS Acknowledges Mistake in Payment Dates
The Internal Revenue Service (IRS) has admitted to sending CP-14 letters to taxpayers demanding payment of taxes owed, but some notices contain incorrect payment dates.
The IRS issued a statement obtained by The Epoch Times, apologizing for any confusion caused and assuring taxpayers that the correct payment deadline is included in a special insert.
Earlier this year, taxpayers in federally declared disaster regions were granted tax relief by the IRS, which extended their deadlines to file tax returns and pay outstanding amounts.
The relief applied to areas affected by severe weather in Alabama, California, Florida, Georgia, Indiana, New York, and Tennessee.
The extended deadlines varied across different disaster areas, with some states’ due dates pushed back until August or October.
Notices Sent to Disaster-Affected Taxpayers
Taxpayers in disaster-affected areas, particularly California, have received CP-14 balance due notices with incorrect deadlines. These notices, such as the one received by Deborah Hill of Oakland, featured a June 26 due date instead of the extended deadline of October 16.
The misleading notices warned of additional penalties if full payment was not received by the stated date.
Several taxpayers in California contacted the IRS customer service and said they were incorrectly informed to wait until October 15 to qualify for delayed payment under the disaster tax relief program.
In response to the confusion, the IRS issued a statement to reassure California taxpayers they still have an automatic extension until later this year to file and pay their taxes and clarified that the current CP-14 mailings, despite stating a 21-day payment deadline, are actually due in October for those in disaster zones.
Many tax professionals in California have noted that the issue primarily affects taxpayers who filed their taxes before the April 18 deadline.
Typically, extensions grant additional time to file returns, but taxes owed are still required to be paid by the original deadline, with late payments subject to interest and penalties; however, in the case of disaster relief extensions, the deadline for paying taxes owed was also extended.
System Glitches and Legal Requirements
The IRS faces challenges in dealing with the complexities of special disaster-related extensions and statutory requirements for balances due notifications. By law, the IRS has 60 days to issue a demand for payment after processing a balance-due tax return.
In the case of disaster-relief eligible tax returns filed before the deadline, the IRS started sending balances due notices 60 days after assessment, disregarding the deadline extension. The current CP-14 mailings are legally required, but the included special inserts clarify the later deadline for taxes owed.
This is not the first time the IRS has encountered issues with CP-14 notices containing incorrect information.
In July 2022, the agency acknowledged that some payments made on tax returns were not correctly applied to joint taxpayer accounts, resulting in erroneous balance due notices being sent.
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