Did you get an IRS notice with a late payment penalty?
June 25, 2013
The IRS has waived the late payment penalty for those taxpayers who requested an extension and are filing one of the 31 tax forms that were delayed due to the tax law changes in the “fiscal cliff” legislation. This article explains the situation and what to do if you receive an automatic assessment notice from the IRS demanding payment.
The IRS is granting penalty relief to some taxpayers who are affected by 31 forms that were delayed this year due to legislation passed at the beginning of the year. (IRS Notice 2013-24)
As you may recall, on January 2, 2013, Congress passed the American Taxpayer Relief Act of 2012 (also known as the “fiscal cliff” law). The wide-ranging law affected a number of tax provisions and the IRS forms used to report them. After the law passed, the IRS had to revise and release certain forms, which resulted in delays for some taxpayers.
Some individual and business taxpayers requested tax-filing extensions because they were attaching to their returns forms that couldn’t be filed until after January.
Deadlines and Late Payment Penalties
Generally, individuals, estates, and trusts are required to file income tax returns and pay any tax due by April 15. Corporations and certain other entities must file returns and pay tax by March 15. Taxpayers can receive an extension using IRS Forms 4868, 7004 or other forms depending on the situation.
Under tax law, there generally is a late payment penalty of 0.5 percent monthly (up to 25 percent), for payments made after the due date. The IRS automatically assesses the penalty and sends a notice and demand for payment.
However, this year, the IRS announced that it will abate the late payment penalty for taxpayers who requested an extension to file a 2012 income tax return that includes one of the forms listed below, which were delayed until February or the first week of March in 2013. (Interest still applies.)
The American Institute of CPAs (AICPA) had requested that the IRS grant penalty relief. The AICPA was concerned about the effect the delays had on partnerships, S corporations, C corporations and other business tax returns.
Important: Contact your tax adviser if you receive a late payment penalty notice from the IRS and believe you are eligible for penalty relief. The IRS will still automatically send late payment penalty notices. Taxpayers and their advisers will have to apply for relief under IRS Notice 2013-24.
Delayed 2012 Forms:
Form 3800, General Business Credit;
Form 4136, Credit for Federal Tax Paid on Fuels;
Form 4562, Depreciation and Amortization (Including Information on Listed Property);
Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands;
Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations;
Form 5695, Residential Energy Credits;
Form 5735, American Samoa Economic Development Credit;
Form 5884, Work Opportunity Credit;
Form 6478, Alcohol and Cellulosic Biofuels Credit;
Form 6765, Credit for Increasing Research Activities;
Form 8396, Mortgage Interest Credit;
Form 8582, Passive Activity Loss Limitations;
Form 8820, Orphan Drug Credit;
Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit;
Form 8839, Qualified Adoption Expenses;
Form 8844, Empowerment Zone and Renewal Community Employment Credit;
Form 8845, Indian Employment Credit;
Form 8859, District of Columbia First-Time Homebuyer Credit;
Form 8863, Education Credits (American Opportunity and Lifetime Learning
Form 8864, Biodiesel and Renewable Diesel Fuels Credit;
Form 8874, New Markets Credits;
Form 8900, Qualified Railroad Track Maintenance Credit;
Form 8903, Domestic Production Activities Deduction;
Form 8908, Energy Efficient Home Credit;
Form 8909, Energy Efficient Appliance Credit;
Form 8910, Alternative Motor Vehicle Credit;
Form 8911, Alternative Fuel Vehicle Refueling Property Credit;
Form 8912, Credit to Holders of Tax Credit Bonds;
Form 8923, Mine Rescue Team Training Credit;
Form 8932, Credit for Employer Differential Wage Payments; and
Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit
This article is courtesy of SBAM Approved Partner AdvanceHR