How much late payment fee from IRS and CA state

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Topic Author
bogle005
Posts: 124
Joined: Thu Jan 02, 2020 11:24 am

How much late payment fee from IRS and CA state

Post by bogle005 »

I'd filed extension to file taxes 6 months ago in Apr-2022, and thought I had well overpaid all due taxes for 2021.
Now when doing taxes I realized that I under-calculated my taxes, essentially missing various investments in an etrade account. I'd filled out investment income from 1099-B from etrade in April, but didn't notice etrade had separate 1099-B forms under different former employer accounts and not a consolidated one.

It looks like I underpaid Federal by ~25k and California-FTB by ~8k.
In the past i've always paid taxes on time. I'm kicking myself for this mistake, as these amounts are not small.

Approximately what penalties I can expect? Any way they can be avoided?
Would irs/CA give any waiver for first mistake?
ccompounder
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Re: How much late payment fee from IRS and CA state

Post by ccompounder »

You can see about the penalty computations: https://www.irs.gov/payments/underpayme ... ls-penalty
Use form 2210: https://www.irs.gov/forms-pubs/about-form-2210

The penalty depends on many factors that we don't have from your message, including if you were high income or not, how much you withheld compared to last year's tax, etc.

You will also pay interest on the missing amount since it was due.
Topic Author
bogle005
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Re: How much late payment fee from IRS and CA state

Post by bogle005 »

ccompounder wrote: Mon Oct 17, 2022 5:01 am You can see about the penalty computations: https://www.irs.gov/payments/underpayme ... ls-penalty
Use form 2210: https://www.irs.gov/forms-pubs/about-form-2210

The penalty depends on many factors that we don't have from your message, including if you were high income or not, how much you withheld compared to last year's tax, etc.

You will also pay interest on the missing amount since it was due.
isn't the late payment for taxes different than the ones for estimated-taxes in above links?

i shouldn't have to pay any estimated-tax penalty as i paid >110% of 2020 fed and CA tax each in 2021 (safe harbor), correct?

2020 fed tax: $90k
2020 CA tax: $35k

2021 fed tax: $125k
2021 CA tax: $50k

2021 fed estimated tax paid: $100k
2021 CA estimated tax paid: $40k
didn't make any other payments in april'21 for yr-2021 than what was already paid as estimated taxes.
MarkNYC
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Joined: Mon May 05, 2008 7:58 pm

Re: How much late payment fee from IRS and CA state

Post by MarkNYC »

You're correct that the late payment penalty is separate from the underpayment penalty relating to estimated tax payments.

The federal late payment penalty is 1/2% per month (or fraction thereof). So if paying 6 months late, the penalty on $25K would be $750.

The CA penalty is 5% plus 1/2% per month. So the penalty for 6 months on $8K would be $740.

If you qualify, you can request and should receive a full abatement of the federal penalty under the IRS First Time Abatement (FTA) policy. The request can be over the phone as well as in writing.
Topic Author
bogle005
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Re: How much late payment fee from IRS and CA state

Post by bogle005 »

MarkNYC wrote: Mon Oct 17, 2022 8:47 am You're correct that the late payment penalty is separate from the underpayment penalty relating to estimated tax payments.

The federal late payment penalty is 1/2% per month (or fraction thereof). So if paying 6 months late, the penalty on $25K would be $750.

The CA penalty is 5% plus 1/2% per month. So the penalty for 6 months on $8K would be $740.

If you qualify, you can request and should receive a full abatement of the federal penalty under the IRS First Time Abatement (FTA) policy. The request can be over the phone as well as in writing.
would one get a letter later from IRS and CA-FTB asking for late penalty with their calculations, and one should request IRS FTA abatement at that time? or does one have to figure the late penalty on one's own and send abatement request with tax filing today?

currently when filing today, it doesn't show any "late tax payment penalty" only the tax amount that i underpaid that I need to pay.

also, is there any kind of waiver (like IRS FTA) in California to for the late penalty?
5% minimum penalty seems hard.
brawlrats
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Re: How much late payment fee from IRS and CA state

Post by brawlrats »

bogle005 wrote: Mon Oct 17, 2022 12:47 pm also, is there any kind of waiver (like IRS FTA) in California to for the late penalty?
5% minimum penalty seems hard.
Reasonable Cause – Individual and Fiduciary Claim for Refund
https://www.ftb.ca.gov/forms/misc/2917.pdf
B Reasonable Cause
Reasonable cause may be established if a taxpayer can show that failure to comply with the law occurred despite the exercise of ordinary business care and prudence. For more information on reasonable cause, go to ftb.ca.gov and search for reasonable cause.

Important
California does not conform to federal relief from penalties based upon good filing history or First-Time Abatement. However, we may abate a penalty if you can provide IRS documentation, which clearly states that the IRS abated the same penalty for “reasonable cause.”
The form seems to indicate you need to pay the penalty then request abatement to get a refund of the penalty.
Topic Author
bogle005
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Re: How much late payment fee from IRS and CA state

Post by bogle005 »

brawlrats wrote: Mon Oct 17, 2022 2:08 pm
bogle005 wrote: Mon Oct 17, 2022 12:47 pm also, is there any kind of waiver (like IRS FTA) in California to for the late penalty?
5% minimum penalty seems hard.
Reasonable Cause – Individual and Fiduciary Claim for Refund
https://www.ftb.ca.gov/forms/misc/2917.pdf
B Reasonable Cause
Reasonable cause may be established if a taxpayer can show that failure to comply with the law occurred despite the exercise of ordinary business care and prudence. For more information on reasonable cause, go to ftb.ca.gov and search for reasonable cause.

Important
California does not conform to federal relief from penalties based upon good filing history or First-Time Abatement. However, we may abate a penalty if you can provide IRS documentation, which clearly states that the IRS abated the same penalty for “reasonable cause.”
The form seems to indicate you need to pay the penalty then request abatement to get a refund of the penalty.
should one mention anything about requesting waiver of underpayment of taxes due in April when filing taxes now, or wait for IRS/CA to come back with a penalty letter with their calculations?

My tax return doesn't show anything related to late fees currently even though software knows I didn't pay the full amount due in april.
brawlrats
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Re: How much late payment fee from IRS and CA state

Post by brawlrats »

bogle005 wrote: Mon Oct 17, 2022 2:42 pm
should one mention anything about requesting waiver of underpayment of taxes due in April when filing taxes now, or wait for IRS/CA to come back with a penalty letter with their calculations?

My tax return doesn't show anything related to late fees currently even though software knows I didn't pay the full amount due in april.
You usually need to wait until the penalty has been levied to request abatement.

Be aware there is often an interest portion to the penalties that can't be abated as it is statutorily required.
Asyouwish
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Re: How much late payment fee from IRS and CA state

Post by Asyouwish »

For federal. https://www.irs.gov/payments/penalty-re ... ive-waiver

The penalty needs to be assessed (posted) on your account. Your return needs to be fully processed and posted. Then you can request a waiver.
Topic Author
bogle005
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Re: How much late payment fee from IRS and CA state

Post by bogle005 »

MarkNYC wrote: Mon Oct 17, 2022 8:47 am You're correct that the late payment penalty is separate from the underpayment penalty relating to estimated tax payments.

The federal late payment penalty is 1/2% per month (or fraction thereof). So if paying 6 months late, the penalty on $25K would be $750.

The CA penalty is 5% plus 1/2% per month. So the penalty for 6 months on $8K would be $740.

If you qualify, you can request and should receive a full abatement of the federal penalty under the IRS First Time Abatement (FTA) policy. The request can be over the phone as well as in writing.
So I received the penalty letter from IRS.

The late amount was ~21k.
It shows penalty of ~$650 (which is exactly 0.5% per month for 6 months), but it also shows "Total Interest" as $521, so total amount ~$1200 !

- What is this "interest" on top of 0.5% penalty?

- Why is this so large?
nalor511
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Re: How much late payment fee from IRS and CA state

Post by nalor511 »

bogle005 wrote: Fri Nov 18, 2022 2:16 pm
MarkNYC wrote: Mon Oct 17, 2022 8:47 am You're correct that the late payment penalty is separate from the underpayment penalty relating to estimated tax payments.

The federal late payment penalty is 1/2% per month (or fraction thereof). So if paying 6 months late, the penalty on $25K would be $750.

The CA penalty is 5% plus 1/2% per month. So the penalty for 6 months on $8K would be $740.

If you qualify, you can request and should receive a full abatement of the federal penalty under the IRS First Time Abatement (FTA) policy. The request can be over the phone as well as in writing.
So I received the penalty letter from IRS.

The late amount was ~21k.
It shows penalty of ~$650 (which is exactly 0.5% per month for 6 months), but it also shows "Total Interest" as $521, so total amount ~$1200 !

- What is this "interest" on top of 0.5% penalty?

- Why is this so large?
Interest is not that high, it's only ~2.4% on the amount that you didn't pay, and you had use of those funds (earning bank interest) during that time. I think the technical calculation is ~5% /12*(months late) so ... Seems fair
Topic Author
bogle005
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Re: How much late payment fee from IRS and CA state

Post by bogle005 »

nalor511 wrote: Fri Nov 18, 2022 2:24 pm
bogle005 wrote: Fri Nov 18, 2022 2:16 pm
MarkNYC wrote: Mon Oct 17, 2022 8:47 am You're correct that the late payment penalty is separate from the underpayment penalty relating to estimated tax payments.

The federal late payment penalty is 1/2% per month (or fraction thereof). So if paying 6 months late, the penalty on $25K would be $750.

The CA penalty is 5% plus 1/2% per month. So the penalty for 6 months on $8K would be $740.

If you qualify, you can request and should receive a full abatement of the federal penalty under the IRS First Time Abatement (FTA) policy. The request can be over the phone as well as in writing.
So I received the penalty letter from IRS.

The late amount was ~21k.
It shows penalty of ~$650 (which is exactly 0.5% per month for 6 months), but it also shows "Total Interest" as $521, so total amount ~$1200 !

- What is this "interest" on top of 0.5% penalty?

- Why is this so large?
Interest is not that high, it's only ~2.4% on the amount that you didn't pay, and you had use of those funds (earning bank interest) during that time. I think the technical calculation is ~5% /12*(months late) so ... Seems fair
somehow the penalty listed as 0.5%/month in terms of per-month gave me the impression that it's treated like an interest and didn't realize a similar interest rate on top of it.

So it effectively becomes ~1% per month, so ~12% per year of overall penalty.

counting only penalty (no interest) it's around 6% per year, which makes it comparable to market returns so not much harm done.
but with interest it's sizeable difference.
nalor511
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Re: How much late payment fee from IRS and CA state

Post by nalor511 »

bogle005 wrote: Fri Nov 18, 2022 2:38 pm
nalor511 wrote: Fri Nov 18, 2022 2:24 pm
bogle005 wrote: Fri Nov 18, 2022 2:16 pm
MarkNYC wrote: Mon Oct 17, 2022 8:47 am You're correct that the late payment penalty is separate from the underpayment penalty relating to estimated tax payments.

The federal late payment penalty is 1/2% per month (or fraction thereof). So if paying 6 months late, the penalty on $25K would be $750.

The CA penalty is 5% plus 1/2% per month. So the penalty for 6 months on $8K would be $740.

If you qualify, you can request and should receive a full abatement of the federal penalty under the IRS First Time Abatement (FTA) policy. The request can be over the phone as well as in writing.
So I received the penalty letter from IRS.

The late amount was ~21k.
It shows penalty of ~$650 (which is exactly 0.5% per month for 6 months), but it also shows "Total Interest" as $521, so total amount ~$1200 !

- What is this "interest" on top of 0.5% penalty?

- Why is this so large?
Interest is not that high, it's only ~2.4% on the amount that you didn't pay, and you had use of those funds (earning bank interest) during that time. I think the technical calculation is ~5% /12*(months late) so ... Seems fair
somehow the penalty listed as 0.5%/month in terms of per-month gave me the impression that it's treated like an interest and didn't realize a similar interest rate on top of it.

So it effectively becomes ~1% per month, so ~12% per year of overall penalty.

counting only penalty (no interest) it's around 6% per year, which makes it comparable to market returns so not much harm done.
but with interest it's sizeable difference.
As stated multiple times in this thread, you can request the penalty to be abated/waived. Interest is only fair - you had use of the funds for 6-8mo longer than you should have. I don't see the problem.
MarkNYC
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Re: How much late payment fee from IRS and CA state

Post by MarkNYC »

bogle005 wrote: Fri Nov 18, 2022 2:38 pm
nalor511 wrote: Fri Nov 18, 2022 2:24 pm
bogle005 wrote: Fri Nov 18, 2022 2:16 pm
MarkNYC wrote: Mon Oct 17, 2022 8:47 am You're correct that the late payment penalty is separate from the underpayment penalty relating to estimated tax payments.

The federal late payment penalty is 1/2% per month (or fraction thereof). So if paying 6 months late, the penalty on $25K would be $750.

The CA penalty is 5% plus 1/2% per month. So the penalty for 6 months on $8K would be $740.

If you qualify, you can request and should receive a full abatement of the federal penalty under the IRS First Time Abatement (FTA) policy. The request can be over the phone as well as in writing.
So I received the penalty letter from IRS.

The late amount was ~21k.
It shows penalty of ~$650 (which is exactly 0.5% per month for 6 months), but it also shows "Total Interest" as $521, so total amount ~$1200 !

- What is this "interest" on top of 0.5% penalty?

- Why is this so large?
Interest is not that high, it's only ~2.4% on the amount that you didn't pay, and you had use of those funds (earning bank interest) during that time. I think the technical calculation is ~5% /12*(months late) so ... Seems fair
somehow the penalty listed as 0.5%/month in terms of per-month gave me the impression that it's treated like an interest and didn't realize a similar interest rate on top of it.

So it effectively becomes ~1% per month, so ~12% per year of overall penalty.

counting only penalty (no interest) it's around 6% per year, which makes it comparable to market returns so not much harm done.
but with interest it's sizeable difference.
When a federal extension is filed, any tax that remains unpaid beyond the original due date will be subject to an interest charge until paid, using prevailing interest rates. In addition, if less than 90% of total tax shown on the tax return is paid by the original due date, then the late payment penalty of .5% per month will also be assessed.

When an extension is filed, the IRS wants to provide a financial incentive to pay all (or almost all) of the tax by the original due date. If the overall financial penalty was minimal, then more taxpayers would choose not to pay all of their tax by April 15th - and the government does not want that.

Many states will assess an interest/penalty combination that is proportionately worse than federal.
Topic Author
bogle005
Posts: 124
Joined: Thu Jan 02, 2020 11:24 am

Re: How much late payment fee from IRS and CA state

Post by bogle005 »

MarkNYC wrote: Fri Nov 18, 2022 3:19 pm
bogle005 wrote: Fri Nov 18, 2022 2:38 pm
nalor511 wrote: Fri Nov 18, 2022 2:24 pm
bogle005 wrote: Fri Nov 18, 2022 2:16 pm
MarkNYC wrote: Mon Oct 17, 2022 8:47 am You're correct that the late payment penalty is separate from the underpayment penalty relating to estimated tax payments.

The federal late payment penalty is 1/2% per month (or fraction thereof). So if paying 6 months late, the penalty on $25K would be $750.

The CA penalty is 5% plus 1/2% per month. So the penalty for 6 months on $8K would be $740.

If you qualify, you can request and should receive a full abatement of the federal penalty under the IRS First Time Abatement (FTA) policy. The request can be over the phone as well as in writing.
So I received the penalty letter from IRS.

The late amount was ~21k.
It shows penalty of ~$650 (which is exactly 0.5% per month for 6 months), but it also shows "Total Interest" as $521, so total amount ~$1200 !

- What is this "interest" on top of 0.5% penalty?

- Why is this so large?
Interest is not that high, it's only ~2.4% on the amount that you didn't pay, and you had use of those funds (earning bank interest) during that time. I think the technical calculation is ~5% /12*(months late) so ... Seems fair
somehow the penalty listed as 0.5%/month in terms of per-month gave me the impression that it's treated like an interest and didn't realize a similar interest rate on top of it.

So it effectively becomes ~1% per month, so ~12% per year of overall penalty.

counting only penalty (no interest) it's around 6% per year, which makes it comparable to market returns so not much harm done.
but with interest it's sizeable difference.
When a federal extension is filed, any tax that remains unpaid beyond the original due date will be subject to an interest charge until paid, using prevailing interest rates. In addition, if less than 90% of total tax shown on the tax return is paid by the original due date, then the late payment penalty of .5% per month will also be assessed.

When an extension is filed, the IRS wants to provide a financial incentive to pay all (or almost all) of the tax by the original due date. If the overall financial penalty was minimal, then more taxpayers would choose not to pay all of their tax by April 15th - and the government does not want that.

Many states will assess an interest/penalty combination that is proportionately worse than federal.
Ah, I see.
does the IRS First time abatement (FTA) for underpayment of taxes only apply to penalty or also to interest?

If I claimed "estimated tax" payment waiver due to reasonable cause of a few hundred dollars (not the underpayment of regular tax) for yr-2020, would the FTA still apply since that was for "estimated" taxes?
MarkNYC
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Joined: Mon May 05, 2008 7:58 pm

Re: How much late payment fee from IRS and CA state

Post by MarkNYC »

bogle005 wrote: Sat Nov 19, 2022 11:40 am
MarkNYC wrote: Fri Nov 18, 2022 3:19 pm
bogle005 wrote: Fri Nov 18, 2022 2:38 pm
nalor511 wrote: Fri Nov 18, 2022 2:24 pm
bogle005 wrote: Fri Nov 18, 2022 2:16 pm

So I received the penalty letter from IRS.

The late amount was ~21k.
It shows penalty of ~$650 (which is exactly 0.5% per month for 6 months), but it also shows "Total Interest" as $521, so total amount ~$1200 !

- What is this "interest" on top of 0.5% penalty?

- Why is this so large?
Interest is not that high, it's only ~2.4% on the amount that you didn't pay, and you had use of those funds (earning bank interest) during that time. I think the technical calculation is ~5% /12*(months late) so ... Seems fair
somehow the penalty listed as 0.5%/month in terms of per-month gave me the impression that it's treated like an interest and didn't realize a similar interest rate on top of it.

So it effectively becomes ~1% per month, so ~12% per year of overall penalty.

counting only penalty (no interest) it's around 6% per year, which makes it comparable to market returns so not much harm done.
but with interest it's sizeable difference.
When a federal extension is filed, any tax that remains unpaid beyond the original due date will be subject to an interest charge until paid, using prevailing interest rates. In addition, if less than 90% of total tax shown on the tax return is paid by the original due date, then the late payment penalty of .5% per month will also be assessed.

When an extension is filed, the IRS wants to provide a financial incentive to pay all (or almost all) of the tax by the original due date. If the overall financial penalty was minimal, then more taxpayers would choose not to pay all of their tax by April 15th - and the government does not want that.

Many states will assess an interest/penalty combination that is proportionately worse than federal.
Ah, I see.
does the IRS First time abatement (FTA) for underpayment of taxes only apply to penalty or also to interest?

If I claimed "estimated tax" payment waiver due to reasonable cause of a few hundred dollars (not the underpayment of regular tax) for yr-2020, would the FTA still apply since that was for "estimated" taxes?
For individual tax returns, the FTA policy of the IRS applies to penalties for late filing and late payment. It does NOT apply to interest.

The FTA policy does not apply to the penalty for underpayment of estimated tax. If this type penalty is present, it will be disregarded when the IRS considers whether the taxpayer qualifies for FTA administrative relief.
Topic Author
bogle005
Posts: 124
Joined: Thu Jan 02, 2020 11:24 am

Re: How much late payment fee from IRS and CA state

Post by bogle005 »

MarkNYC wrote: Sun Nov 20, 2022 12:44 pm
bogle005 wrote: Sat Nov 19, 2022 11:40 am
MarkNYC wrote: Fri Nov 18, 2022 3:19 pm
bogle005 wrote: Fri Nov 18, 2022 2:38 pm
nalor511 wrote: Fri Nov 18, 2022 2:24 pm
Interest is not that high, it's only ~2.4% on the amount that you didn't pay, and you had use of those funds (earning bank interest) during that time. I think the technical calculation is ~5% /12*(months late) so ... Seems fair
somehow the penalty listed as 0.5%/month in terms of per-month gave me the impression that it's treated like an interest and didn't realize a similar interest rate on top of it.

So it effectively becomes ~1% per month, so ~12% per year of overall penalty.

counting only penalty (no interest) it's around 6% per year, which makes it comparable to market returns so not much harm done.
but with interest it's sizeable difference.
When a federal extension is filed, any tax that remains unpaid beyond the original due date will be subject to an interest charge until paid, using prevailing interest rates. In addition, if less than 90% of total tax shown on the tax return is paid by the original due date, then the late payment penalty of .5% per month will also be assessed.

When an extension is filed, the IRS wants to provide a financial incentive to pay all (or almost all) of the tax by the original due date. If the overall financial penalty was minimal, then more taxpayers would choose not to pay all of their tax by April 15th - and the government does not want that.

Many states will assess an interest/penalty combination that is proportionately worse than federal.
Ah, I see.
does the IRS First time abatement (FTA) for underpayment of taxes only apply to penalty or also to interest?

If I claimed "estimated tax" payment waiver due to reasonable cause of a few hundred dollars (not the underpayment of regular tax) for yr-2020, would the FTA still apply since that was for "estimated" taxes?
For individual tax returns, the FTA policy of the IRS applies to penalties for late filing and late payment. It does NOT apply to interest.

The FTA policy does not apply to the penalty for underpayment of estimated tax. If this type penalty is present, it will be disregarded when the IRS considers whether the taxpayer qualifies for FTA administrative relief.

I called IRS on phone and the rep removed the penalty. Interestingly, the rep said they would be able to remove the interest portion also if I file the paper form 843.

From CA-FTB, I just received the penalty letter for underpayment amount of $7.5k.
Underpayment penalty ~$600, Estimated tax penalty ~$40, Interest ~$115
Total penalty due ~$750

can one get penalties for CA-FTB removed similarly as first-time-abatement? or possible to get penalties waived for CA for other reasons?
MarkNYC
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Re: How much late payment fee from IRS and CA state

Post by MarkNYC »

bogle005 wrote: Fri Dec 02, 2022 12:28 am
MarkNYC wrote: Sun Nov 20, 2022 12:44 pm
For individual tax returns, the FTA policy of the IRS applies to penalties for late filing and late payment. It does NOT apply to interest.

The FTA policy does not apply to the penalty for underpayment of estimated tax. If this type penalty is present, it will be disregarded when the IRS considers whether the taxpayer qualifies for FTA administrative relief.

I called IRS on phone and the rep removed the penalty. Interestingly, the rep said they would be able to remove the interest portion also if I file the paper form 843.

From CA-FTB, I just received the penalty letter for underpayment amount of $7.5k.
Underpayment penalty ~$600, Estimated tax penalty ~$40, Interest ~$115
Total penalty due ~$750

can one get penalties for CA-FTB removed similarly as first-time-abatement? or possible to get penalties waived for CA for other reasons?
Form 843 can be used to get interest abated ONLY when the interest was caused by IRS errors or delays. So I don't think you'll succeed with that, but you're welcome to try.

Your questions regarding CA abatement of penalties were previously answered above by brawlrats.
Topic Author
bogle005
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Re: How much late payment fee from IRS and CA state

Post by bogle005 »

MarkNYC wrote: Fri Dec 02, 2022 9:04 am
bogle005 wrote: Fri Dec 02, 2022 12:28 am
MarkNYC wrote: Sun Nov 20, 2022 12:44 pm
For individual tax returns, the FTA policy of the IRS applies to penalties for late filing and late payment. It does NOT apply to interest.

The FTA policy does not apply to the penalty for underpayment of estimated tax. If this type penalty is present, it will be disregarded when the IRS considers whether the taxpayer qualifies for FTA administrative relief.

I called IRS on phone and the rep removed the penalty. Interestingly, the rep said they would be able to remove the interest portion also if I file the paper form 843.

From CA-FTB, I just received the penalty letter for underpayment amount of $7.5k.
Underpayment penalty ~$600, Estimated tax penalty ~$40, Interest ~$115
Total penalty due ~$750

can one get penalties for CA-FTB removed similarly as first-time-abatement? or possible to get penalties waived for CA for other reasons?
Form 843 can be used to get interest abated ONLY when the interest was caused by IRS errors or delays. So I don't think you'll succeed with that, but you're welcome to try.

Your questions regarding CA abatement of penalties were previously answered above by brawlrats.
The Reasonable Cause – Individual and Fiduciary Claim for Refund https://www.ftb.ca.gov/forms/misc/2917.pdf form asks to look for what qualifies as "reasonable cause" by searching on FTB website, but the search there doesn't seem to show its definition.

I'm thinking of mentioning that I had unexpectedly large ~1.5x times increase in income compared to previous years due to stock sales that were missed in the April tax payment when filing extension, and this happened for the first time. is there any point in even trying to go through the paperwork if they don't grant these waivers?
they don't do it over the phone?

the search on FTB for reasonable cause gave a link to the FTA abatement but not sure if this applies https://www.google.com/url?client=inter ... CGCiRkoiJo
Topic Author
bogle005
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California underpayment penalty

Post by bogle005 »

[Thread merged into here --admin LadyGeek]

I received an underpayment penalty letter from CA FTB. They seem to allow some forms of underpayment penalty waivers in the Reasonable Cause – Individual and Fiduciary Claim for Refund https://www.ftb.ca.gov/forms/misc/2917.pdf form

The form asks to look for what qualifies as "reasonable cause" by searching on FTB website, but the search there doesn't seem to show its definition. the search on FTB for reasonable cause gave a link to the FTA abatement but not sure if this applies https://www.google.com/url?client=inter ... CGCiRkoiJo

I'm thinking of mentioning that I had unexpectedly large ~1.5x times increase in income compared to previous years due to stock sales that were missed in the April tax payment for tax-year-2021 when filing extension (paid all taxes due by the extension deadline in Oct 2022), and this happened for the first time. even though it may not fit their exact "reasonable cause" criteria, is it still possible it may be granted depending on who looks at the waiver-request?

IRS granted underpayment penalty waiver on the phone due to first-time-abatement.

is there any point in even trying to go through the paperwork if they don't grant these waivers?
do they do it over the phone?
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Re: How much late payment fee from IRS and CA state

Post by LadyGeek »

bogle005 - In order to provide appropriate advice, it's best to keep all the information in one spot. I merged your update back into the original thread. If you have any questions, ask them here.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
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