Did you receive a notice from the IRS stating that you have a balance due on your 2021 individual tax return, but you know you paid the balance on time? So did a lot of other tax payers!
It turns out that the IRS is having some internal matching issues and is aware that some payments made for 2021 tax returns have not been correctly applied to joint taxpayer accounts. These taxpayers are receiving erroneous balance due notices (CP-14 notices) or notices showing the incorrect amount due.
How did these erroneous balance due notices happen?
Basically, if a spouse (the second taxpayer listed on the return) submitted the payment through their online account the system did not register that this should be applied to their return because they weren’t listed first. There are some outside of this situation who may also be affected but the above scenario is the mass majority of taxpayers who received these notices.
What should you do about the balance due notices?
First, don’t panic! The IRS still has a record of your payment. You can confirm this by checking your Online Account under the SSN that made the payment. Next, you should always send a copy of your notice to your tax advisor for their records and their ability to help you if it’s needed. When sending this notice to them please advise them that you did pay the amount due in full, on time and electronically or by check so they are aware. Lastly, there is no immediate action or phone call required nor should you respond to the notice at this time. The IRS is researching the matter and will provide an update as soon as possible. Please note that the IRS is stating that any assessed penalties and interest will be automatically adjusted when the payment(s) are applied correctly.
If you did not pay in full
Taxpayers who paid only part of the tax reported due on their 2021 joint return should pay the remaining balance or follow instructions on the notice to enter into an installment agreement or request additional collection alternatives. Your tax advisor can help you with this process.
If you have any questions about the ruling, contact your Henry+Horne advisor today.
Meghan Riley, EA