Welcome back! Ask questions, get answers, and join our large community of tax professionals.

Force IT-2210 (Indiana Tax Underpayment Schedule)

cancel
Showing results for 
Search instead for 
Did you mean: 

Force IT-2210 (Indiana Tax Underpayment Schedule)

hedgeslaw

Please put a check box to force ProSeries-Indiana Individual module to include with the return, the IT-2210 because, based on my experience, I think the Department of Revenue does not know at processing time what the prior year tax liability is, so if the balance due on Jan 15th of the following year is greater than $1,000, penalty and interest letters are sent out even if they met their deposit requirements because of the prior year tax. Also, if the taxpayer makes and additional payment with their extension and a refund is due, the erroneous penalty and interest are deducted from the refund. By forcing the IT-2210 to be included would solve this issue. It would also be helpful if the final review diagnostic would identify an amount owed over $1,000 as of Jan 15th of the following year but the taxpayer has met their deposit requirements due to the prior year tax liability and ask for consideration if the proposed check box should be marked  Thank you.

Status: New
0 Votes
Vote now if this is a good idea
2 Comments
dkh
Level 12

By "include with the return" do you mean to print or to calculate?   The F2210 does automatically calculate when required.  And unless I changed my print settings and don't remember - it prints also.

Who gets a return done by January 15th ?  

hedgeslaw
Level 3

Thanks for your reply. This is all about the estimated tax penalty safe harbor.

SUMMARY: When the safe harbor for having paid estimates totaling 100% of last year's tax liability is used to eliminate the underpayment penalty, the IT-2210 should be (but is not) included with the efiled Indiana tax return and printed with the return. It only prints and is only included if there is a penalty resulting. The safe harbor loses out because there is no penalty. (NOTE: The IRS knows that the safe harbor is being used without the need for the 2210 but Indiana doesn't know without the form)

Apparently, when there is an Indiana underpayment, the IT-2210 form is not required to be printed unless a penalty is calculated. Here is the problem, when there is an underpayment but there is no penalty liability because of having met the deposit requirement of the safe harbor, the IT-2210 is calculated, but not printed and apparently, not included with the efiled return. Here is the result ... erroneous penalty assessments-which could be avoided by merely including the IT-2210.

By "include with return" I was referencing that the IT-2210 which should be included with the eFiled return. I agree the calculation on the form is made automatically. And when I go to that form, I can see that it is calculated properly and I can see that the taxpayer owes no penalty under the safe harbor. But since Indiana doesn't get that form showing that safe harbor protection, (and they apparently don't check their own records) the taxpayer gets a penalty and interest assessment ... and dealing with them during the pandemic and even in normal times is time consuming and could be avoided by including the IT-2210 with the efiled return. Additionally, if the erroneous assessment is not paid immediately, a tax warrant is issued on the 30th day. The Dept of Rev will eventually recall the tax warrant but they won't issue a letter stating it was issued in error, so the taxpayer's credit file (Equifax etc) shows the tax warrant hit for 7 years and they must supply a statement of their own disputing the entry in their credit record. That is why I stated that it should be included with the efiled return even if no penalty. I have been through this way too many times. When I filed on paper, I always included that IT-2210 and never got a penalty assessment.

I am going to change the print settings to force the form to print if it has any data, but I am not sure that will trigger it being sent with the eFiled return because the default print setting was already set to print "if required." I am not sure that printer setting will transfer to next year.  Too bad we don't have a way to see what form will be included with the efiled return. As far as I can tell all we can see is a list of all the forms the can be efiled. Even if I could see it wasn't included, I don't know how I could force it to.

Finally, if an additional estimated payment is made (e.g. with extension) after Jan 15th and before the tax return is efiled resulting in an overall refund being due, the penalty and interest is deducted from the refund. Again, getting a refund during the pandemic or otherwise is time consuming when merely adding the form to the efiled return would solve the problem. This may be an Indiana-only problem, but it has been this way for a very long time and adding the IT-2210 seems to solve the problem ... at least on paper-filed returns.

Regarding "who gets their tax return filed by Jan 15th" --- I don't know. None of my clients, for certain.  However, that is the due date for the 4th Qtr estimated tax deposit which is also the determination day for testing compliance with the safe harbor.

 

Post comment