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electronic withdrawal of federal estimates for 2021

ILL
Level 2

So far none of my clients have indicated the payments were made? Will they be backdated?

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11 Replies 11
Just-Lisa-Now-
Level 15
Level 15

IRS is behind in payment processing, have them call the EFT phone number on the 8879 if they want to verify that the payment is scheduled, but dont be surprised if it takes a couple weeks for the payment to pull..


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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ILL
Level 2

Thanks Lisa it seems the most logical reason.

All you others, pro series has offered this service for the last several years and my clients seem to love it.It worked well!! Many are elderly and like the worry free schedule of payments sans mailing in checks and vouchers. It is a service and if my clients don't want to do it I don't force it it is optional!!! 

I realize especially this tax season it is 1 more thing that can go wrong - MURHYS LAW!!! However I would have thought the IRS would have now acknowledged it as a problem.

Thanks for all the responses

 

 

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BobKamman
Level 14

My guess is that 75% of them could avoid quarterly payments because they have regular income for which withholding can be elected.  I don't like withholding on Social Security, because it's difficult to change or stop, but pensions are fine and the benefit of IRA distributions is that the tax withholding can be varied as the income changes.  

The problem with these codgers is that they don't really see their income and dividends as income.  They don't spend it, they live on their pensions and Social Security and let the investment income accumulate.  Then they start losing competence (not to mention continence) and whoever is helping them with finances has the added burden of one more tax obligation. 

Then there are those who might owe a couple thousand at the end of the year but would never get a bill from IRS because the penalty is under the criterion for charging it.  

Consider the preparers who set these people up for quarterly payments in the first place.  It was a profit center for many of them.  They wanted to prepare those 1040-ES forms because they could charge extra for it.  There was no incentive to suggest withholding as an alternative.  

There may be a different preparer today.  The client has to be re-educated that quarterly is not the only choice.  If no one tells them the world has changed, they'll still be driving their Oldsmobile to the bank to deposit the dividend checks they refuse to put in a brokerage account.  

rcave
Level 2

Thank you for this information.

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jeffmcpa2010
Level 8

Should have printed vouchers and given them to the taxpayers.

 

Then it wouldn't have become your problem.

PATAX
Level 10

👍 Jeff, another question is why would a tax preparer want to schedule electronic payments? I cannot ever recall even one taxpayer asking me to schedule an electronic payment, including many taxpayers who are not proficient in English. Just my opinion.

jeffmcpa2010
Level 8
jeffmcpa2010_0-1618753759587.png

 

 "Jeff, another question is why would a tax preparer want to schedule electronic payments? I cannot ever recall even one taxpayer asking me to schedule an electronic payment, including many taxpayers who are not proficient in English. Just my opinion"

PATAX - Agreed. I have never even discussed it with any clients. Heck when e-file started (many moons ago) I had clients who didn't even want direct deposit, as they didn't trust it.

And I certainly have never had a client ask for it.

It has even been several years (Certainly 5 possibly 10) since a client called me wondering when their refund might show up. (Stimulus payments - yes I have had those questions). All I ever did was point them to the information in the 9325 which I mail them after IRS acknowledges receipt.

I really don't understand why so many practitioner's seem to be using it. Basically when that return leaves my office I want it known that ANY thing else that needs done is the taxpayer's responsibility. I just think it adds a headache that I don't need and potential liability if something goes bad. (Even if the liability is not enforced financially, a hit to the client's trust level in you is a liability as well)

Jeff

BobKamman
Level 14

If they had mailed the payment on April 15 to some place on the Ohio River, they would not have been delivered yet and it might take the private bank a couple more days to process them.  The 1040-ES instructions tell us,

If you mail your payment and it is postmarked by the
due date, the date of the U.S. postmark is considered the
date of payment. 

Does anyone really think that the banks are keeping copies of the envelopes with postmarks?  This is 1950s outlook on tax administration, left from back when all 58 district offices processed returns and payments and April 16 was celebrated by IRS employees as "Opening Day."

The instructions also remind us, "You can pay all of your estimated tax by April 15, 2021, or in four equal amounts by the dates shown below."  In these days of low interest rates, I have several clients who prefer to do that.  I don't wear suspenders and a green eye shade and I don't babysit my clients who could pay their tax through withholding but don't.  However, It's OK with me if other practitioners want to provide that service. 

Their job, though, should be to lower expectations, not to overpromise.  "You know, nothing set up online with IRS computers is fail-safe these days, so we'll do this but it's a good idea to check your statements at the end of the month and make sure the money came out of your account.  And if it doesn't, it's no big deal.  Just go back to the way most other people choose. It's not really a deadline, it's a squishy due date."

Sort of like paper returns -- IRS doesn't start checking postmarks until a week or so after April 15.  

Yes, I know.  Not all of the lockboxes are on the Ohio River and might have to close if it floods.  We have one in hurricane country, where Hugo knocked out power for weeks, back in 1989.  So electronic payments are the way to go.  Teach a client how to do it and they may start paying all their bills that way.  

 

dkh
Level 11

@BobKamman   I'm going to use your - It's not really a deadline, it's a squishy due date   when clients call me in a panic because they missed paying an estimate by the due date.    😁     

rcave
Level 2

I have the same issue with returns filed in April.  Payments are not being made to IRS.

IntuitAustin
Community Manager
Community Manager

It is possible you were affected by an issue with ProSeries that caused 2021 Q1 Estimated payments not to be withdrawn. Please see this post for details and instructions on checking to see if your client was impacted. 

https://proconnect.intuit.com/community/proseries-tax-news-updates/discussion/1040-es-payments-not-b...


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