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Charles Markham
Charles Markham, EA, MST, USTCP
Category: Tax
Satisfied Customers: 769
Experience:  IRS Enrolled Agent, US Tax Court Practitioner
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Please, please only answer if you have lots of direct experience

Resolved Question:

Please, please only answer if you have lots of direct experience in this very specific area. Our tax professional filed our taxes with a collection date of taxes owed before April 17th, this years deadline. The IRS attempted to withdrawal funds from our account on April 10th. There were insufficient funds at that time. There were sufficient funds the next day, and we did pay our taxes by check postmarked before April 17th. We have now received a penalty from the IRS for 2% of the total taxes owed. We feel this is very putative and will attempt to have this waived. What are grounds for having this waived?
Submitted: 5 years ago.
Category: Tax
Expert:  Charles Markham replied 5 years ago.

TaxWhisperer :

First off, not to call anyone a liar, but when you file your tax return, your return preparer can specify any date he wants for the debit date. I suppose he is telling you he specified 4-17. Quite frankly, I think he forgot at the end of tax season to specify a date and the IRS just took the money as soon as you filed the return. ANYWAY, the good news is that the IRS will routinely waive this penalty the FIRST TIME. They will do this based on the fact that this has never happened previously. If your preparer is signed up with "E-Services" he can make the request online and have an answer back in a couple of days.

TaxWhisperer :

If you want to write a letter in response, please feel free to do so. State that: (a) you instructed your preparer to debit the amount on 4-17 and he swears to you that's what he did but that the money was attempted to be debited on 4-10. and that (b) you've never inucrred such a penalty before and that you request the penalty be abated this one time. You should also state that you will make attempts to avoid this happening again.

TaxWhisperer :

An alternative is to say that you and your preparer got your wires crossed, and you will have better communication in the futre.

TaxWhisperer :

I would also point out that you timely paid your balance due by the original due date.

TaxWhisperer :

Seriously, there won't be any issue.

TaxWhisperer :

Also, as a tax professional, I appreciate that you trust your tax pro so much, but frankly he goofed.

Customer: replied 5 years ago.
My tax person want me to sign a power of attorney form to let them straighten out this mess (I really think they want to bill me more hours). Is this something that I should leave to the pros, and pay for? I am happy to pay if it means I will be more likely to get my 2% back. However, if it is all the same, I would rather write the letter myself.

Is there a place on my tax forms that states the date for IRS auto withdrawal? I have looked at my 2011 forms for a date and can't find one specified.

Is there a specific IRS department that I could call? Is a letter best?

Thanks very much!

Expert:  Charles Markham replied 5 years ago.

First off, I would never charge my client for such a screw up, but that's me. This is literally going to take sending a brief email to the IRS.


Yes, I think a request from your POA would make it stronger.


However, it is extremely reasonable to ask for a firm fee as to what this will cost (once again, I am amazed that they have the nerve to charge for their own error). Also, it is fair to ask that you not have to pay if their request isn't successful.


No, there is no date on your forms, but the date is in our software. THE DATE IS A REQUIRED FIELD.


A phone call will not work, needs to be a letter.



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