Don’t pay your taxes (yet) – The Mercury News

By Jon Healey, Los Angeles Occasions

A ball of confusion — that’s what the IRS is at present, a minimum of for a lot of Californians.

The Inside Income Service introduced in early January that taxpayers in disaster-stricken counties would have more time to file their returns and pay their taxes. Since then, it has amended its stance a number of occasions, including extra counties and lengthening the cost deadlines — after which seemingly shifting up the deadlines and canceling the aid.

The most recent hiccup: Taxpayers who filed their returns early however delayed paying what they owed are getting “discover and demand” letters from the IRS, telling them they face penalties and curiosity costs in the event that they don’t pay inside 21 days. Provided that they learn right through the four-page letter will they discover a paragraph on the finish telling them to ignore the whole lot that got here earlier than it in the event that they stay in an space lined by a catastrophe declaration — which incorporates 57 of the state’s 58 counties.

Say what?

In keeping with a blog post by the national taxpayer advocate, federal legislation typically requires the IRS to ship you a “discover and demand” letter inside 60 days of your revenue tax being assessed. And the second the IRS processes your return, your tax is assessed.

That’s why the company feels compelled to ship the letters to individuals who’ve already filed their returns however have but to pay what they owe, regardless that the demand is untimely. Making issues worse, it caught with the same old panic-inducing type letter for the sake of expediency, including “a brief paragraph on web page 4 of the discover that basically says by no means thoughts — ignore the three pages you simply learn,” the taxpayer advocate’s weblog put up stated.

For Californians in Modoc and Shasta counties, the precise deadline is Aug. 15. For the remainder of the state, apart from Lassen County, the deadline is Oct. 16. (Lassen was not lined by any catastrophe declaration.) The deadline applies not simply to quantities due for 2022, but in addition estimated tax funds for the primary two to 3 quarters of 2023.

When you haven’t already marked your calendars, accomplish that now — these are the right dates. You probably have a refund coming, nonetheless, it’s best to file your return as quickly as you possibly can; in any other case, you’re giving the federal authorities an interest-free mortgage.

The IRS put out a statement June 7 saying it “reassures California taxpayers that they proceed to have an automated extension till later this 12 months to file and pay their taxes for these lined by disaster declarations within the state.” Three weeks later, it introduced that it might ship follow-up letters to taxpayers who obtained notices in California and 7 different disaster-stricken states “to allow them to know that they’ve extra time to pay their taxes.”

These letters state in English and in Spanish: “Since your tackle of document is positioned in a federally declared catastrophe space, the IRS has routinely granted you catastrophe aid. This offers you an extension of time to file your tax returns in addition to make your tax cost listed” on the demand notices. They add, “You don’t want to contact us to get this further time to pay.”

Past that, the company has up to date the insert that accompanies the demand notices “to make it clearer that the cost date listed within the letter doesn’t apply to these lined by a catastrophe declaration, and the catastrophe dates stay in impact.” The insert (in English and Spanish) features a QR code that hyperlinks to the IRS.gov disaster web page, on which taxpayers can scroll via almost 30 statements to search out the 4 that apply to varied elements of California.

In keeping with the taxpayer advocate, greater than 1 million taxpayers in these states filed returns with an unpaid steadiness earlier than their prolonged deadlines. That’s numerous new IRS pen pals.

For its half, the California Franchise Tax Board said it received’t ship statements of tax due “till the tax is due and payable in accordance with the catastrophe extension due dates.” For extra data on California deadlines and eligibility, see the Disaster Relief web page on the Franchise Tax Board’s web site.

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