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Clients not receiving credit for payments made on their returns

caj111
Level 3

I now have three different clients who have received notices from the IRS, just a few weeks after filing their 2020 tax returns, I would add, that say their taxes are not paid in full and they owe the difference between their 2020 tax liability and the amount of tax withheld on their W-2 forms.  Two of these clients sent in extension payments, another simply paid the balance due with the Form 1040-V.  Two paid online, one paid by cashier check.  Essentially, the IRS has ignored these additional payments (payments made in addition to regular withholding) as if they were never made and is sending notices saying they owe these amounts, plus interest and penalties.  Has anyone else run into this problem? 

On top of that, when accessing the clients' tax transcripts, these additional payments don't show up on the transcript, only the taxes that were withheld, so the information transcripts are matching what these notices say (which are incorrect because my clients paid in full).

Calling the IRS, as I'm sure everyone knows, is almost impossible these days.  Does it make sense to simply mail in a response with proof of payment?

1 Solution

Accepted Solutions
caj111
Level 3

It wasn't my idea to make the payment by cashier check.  I don't know why the clients did it that way.  They mailed that check to the address on the Form 1040-V (it wasn't an extension payment).  The other two clients made extension payments online.

In any case, I was able to get through today (through various methods of manipulating the phone system) and discovered the problem.  In all three cases, the client made the payment under their spouse's Social Security number and not the primary Social Security number.   This happened one other time with a client something like three years ago, never had it happen with three clients the same year.  While it is smarter to make the payment under the primary Social Security number as I've always advised my clients to do, some forget and it was never much of a problem until this year.

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5 Replies 5
sjrcpa
Level 15

"Does it make sense to simply mail in a response with proof of payment?"

Yes. and wait months for the correspondence and payments to get matched up.


ex-AllStar
caj111
Level 3

You're probably right, but I don't see any other alternative.  Getting through on the phone is hopeless, whether on the practitioner priority line or the other number.  Also, has anyone else out there had this issue with clients?

BobKamman
Level 14

What would you expect if you could get through on the phone?  "OK, wait a minute ... yes, I just found the check here in this drawer.  We'll cash it right away." ?  

How do you track a payment made with a cashier's check?  That's an even worse waste of money than certified mail.  I suppose for a fee the bank will tell you what happened with it.  

Extensions with payments are sent to a different address than those without.  The address is a private lockbox.  These were mailed?  Did you provide the envelope or address?  Did they write their name and SSN on the check? 

 

caj111
Level 3

It wasn't my idea to make the payment by cashier check.  I don't know why the clients did it that way.  They mailed that check to the address on the Form 1040-V (it wasn't an extension payment).  The other two clients made extension payments online.

In any case, I was able to get through today (through various methods of manipulating the phone system) and discovered the problem.  In all three cases, the client made the payment under their spouse's Social Security number and not the primary Social Security number.   This happened one other time with a client something like three years ago, never had it happen with three clients the same year.  While it is smarter to make the payment under the primary Social Security number as I've always advised my clients to do, some forget and it was never much of a problem until this year.

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BobKamman
Level 14

Now you know who wears the pants in those families.  Well, OK, who controls the checkbook.

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