The Worst Written IRS Notice Ever?

A client, living in a foreign country but who receives his mail in New Jersey (because mail to New Jersey is far more reliable than where he resides) received an IRS notice on his 2021 tax return:

Your refund has been reduced
We’ve reduced your penalty for failing to pay estimated taxes

We reviewed your Form 1040 for the tax period ending 2021 and found that you miscalculated your estimated tax penalty.

If you were in a disaster area, you may have been granted additional time to file returns and pay taxes. We considered any such time when we computed your penalty. Our correction reduces the penalty to $2,000.00.  You are due a refund of $4,500.00.

The taxpayer, when we filed his return, made an EFTPS payment of $200,000 which included a $6,500 estimated tax penalty. He owed tax–substantial tax, as noted.  He paid it in full.  It wasn’t a refund being reduced; rather his estimated tax penalty was reduced causing him to receive a refund.

Additionally, he doesn’t deserve this refund.  He does not reside in North America and the last time I checked the President cannot declare a disaster area in Europe.

In any case, my client was baffled by the wording and I think we have a “winner” (or, at minimum, an early leader) in the worst written IRS notice of the year.

Tags:

Leave a Reply

You must be logged in to post a comment.