Over the past month, many of us, accountant and client alike, have received a notice from the IRS for underpayment of taxes related to a Form 1041 (U.S. Income Tax Return for Estates and Trusts) that was filed electronically with a balance due. If you filed your return electronically and paid the tax liability with a check mailed to Kansas City, in all likelihood that check is still in the envelope and has not been credited to the 2019 tax year because the Kansas City office has only recently reopened. That hasn’t stopped the computer generation of deficiency notices for the year. If the amount due on the notice is the same as the amount of the check you wrote plus the penalty and interest charged, it might take a couple of months but the payment you sent will be credited and there will be no penalty or interest charged if payment was timely. However, if you get a deficiency notice and payment was made electronically, contact the preparer immediately. Likewise, if the amount due on the notice does not equal the amount of the check you wrote plus the penalty and interest charged, this should be investigated as soon as possible.
Please contact us if you need assistance with any IRS notice you receive.
This article contributed by Lois S. Fried, CPA, CFE, CVA, ABV.
