Last year I wrote a post noting the following:
A client filed his tax return on October 2nd. He had a balance due (he had made an extension payment, but he still owed some tax). He paid by having his bank account electronically debited with the filing of his tax return. In today’s mail he received a CP14 notice (dated today) alleging he hadn’t paid his balance due. Yikes!
My client was upset. “Russ, you forgot to have my bank account electronically debited.” No, I didn’t forget, and the return shows his payment being accepted for processing. I had a Tax Information Authorization for my client, so I ran an Account Transcript and it showed a $0 balance. My client was relieved, but there appears to be a systemic IRS issue.
The payment went through on October 2nd, but the IRS posted the tax due first (dated October 22nd) without posting his payment. Yet the payment was made, and my client should have never received this notice. It wasted both of our time for no good reason.
Well, history has repeated itself (again). I have two clients (so far) who filed their returns in October, paid by electronic debit with the filing of their returns, and who received CP14 notices stating they owed tax. They didn’t–the payments went through and the IRS shows they received the payments. Yet again, my clients were annoyed (with the bureaucratic stupidity) and both the clients and I had to waste our time chasing down an issue we shouldn’t have had to.
I concluded my post last year with the following:
Several years ago this was an issue for April filers; the IRS corrected the problem by allowing an additional ‘cycle’ before sending out CP14 notices. I hadn’t seen this issue before for extension filers, but it appears we have a case of deja vu all over again. I reported this to the IRS Systemic Advocacy Management System. If you’re a tax professional and run into this issue I urge to to report it, too.
Yes, I reported this again to SAMS. Last year, I was contacted by the Taxpayer Advocate Office/SAMS about this issue. It seems they were not successful in resolving the matter. Hopefully they will be this year.
If you’re a tax professional and your clients receive an erroneous CP14 notice based on this fact pattern, I urge you to report it to SAMS.
Tags: CP14