After the fires last January, the IRS delayed the due date for filing tax returns due between Jan. 7 and Oct. 14 to Oct. 15 for taxpayers residing in Los Angeles County.
That notice also deferred the due date until Oct. 15 for tax payments that were due during that period. In response, many taxpayers in L.A. County postponed filing their returns and paying their federal income tax. Unfortunately, the federal government shutdown has interfered with the processing of many tax payments made during the shutdown.
I was one of those who took advantage of the postponed payment deadline. I deferred paying the balance due with my 2024 income tax return until Oct. 6, when I paid using the IRS web payment portal. The IRS took the funds out of my bank account the following day. Last week, I was surprised to receive an undated notice from the IRS stating that I had not paid my taxes by Oct. 15. The IRS asserted penalties and interest and expected to receive payment in full of my taxes by Nov. 10.
As a tax practitioner, I am accustomed to seeing IRS notices, but this one was different. Normally there is a cover sheet with a return address that can be used to insert into a window envelope if you want to respond to the notice or pay by check. The notice I received contained a window envelope, but no cover letter. The IRS expects taxpayers to pay online after Sept. 30, so perhaps that is why the cover letter was not included.
The IRS notice said it may not include payments made in the last 15 days, but if I disagreed with the amounts shown in the notice, I had to respond no later than Dec. 19. The notice said I could do so by either calling an IRS 800 number or respond in writing. Presumably, I would waive my rights to dispute the notice if I did not respond by that date.
I tried calling the 800 number to no avail, so I sent a letter to the IRS. Because the IRS notice did not provide an address to which a written response should be sent, I sent the letter to the return address shown on the envelope, but I am not certain that is the correct address to use. I sent the letter via certified mail, return receipt requested, to provide proof that I responded before the Dec. 19 deadline. I also sent a copy of my response to Rep. George Whitesides’ office along with a letter explaining the situation and seeking his assistance.
The day after I mailed the letter to Rep. Whitesides’ office a person from his office called me to discuss it further. During the course of that conversation, I was told the IRS is not presently responding to communications from his office. Whitesides’ office has been extremely attentive to my request.
The government shutdown commenced on Oct. 5, but the IRS used contingency funding to keep the agency open until Oct. 8. On Oct. 8, all “non-essential” IRS personnel were furloughed. What I have surmised is that my payment was processed on Oct. 7, but my account was not simultaneously credited for the payment. Presumably, because the IRS shut down on the following date, my account was never properly credited. Shortly after Oct. 15, the IRS sent me an automated notice imposing interest and penalties and seeking collection of the tax I already paid. Clearly, there appeared to be no manual supervision of the process.
I suspect I am not the only taxpayer in this situation. There probably are other Signal readers who have received (or will receive) similar notices. If you are one of them and have a tax professional prepare your return, you should forward the notice to them and insist that they respond in writing by the date indicated in the letter.
If you prepare your own tax returns without the involvement of a tax professional, I suggest that you consider sending a written response explaining the facts, including proof of payment. The response should respectfully request that the IRS retroactively post the payment to your account and remove all penalties and interest. You might also want to consider sending a copy of the request to George Whitesides. If these notices are widespread, it is important that members of Congress are made aware of this problem.
Hopefully, the IRS can resolve this problem expeditiously, but I am not holding my breath.
Jim de Bree is a semi-retired CPA who resides in Valencia.
