I have received a CP25 from IRS for 2019 tax returns. I had filed for a tax extension (Form 4868) and sent estimated taxes (in the amount of $450) to the United Treasury via a check before the 7/15 deadline. As per bank records, the check was processed on 7/20 - I confirmed that the SSN on the front of the check (written by me) and the SSN on the back of the check (printed by IRS) match and is the correct one.
I paid my federal return before the 10/15 deadline - did not owe any taxes.The CP25 notice (that I received) summarizes that (1) tax I owed is $0.00 (which is correct) and (2) payments I made is $0.00 (which is incorrect). Form Schedule 3 submitted with my federal returns indicates on Line 10 that I had paid $450 along with my request for extension to file.
Is this a case of IRS just making a mistake that can be easily corrected by me just calling them and providing proof of the check? Or is there more to it that I need to be aware of?
A payment with an extension is not an estimated tax payment (even though the amount you pay with the extension might be an estimated amount). Estimated tax payments are quarterly payments that you make during the year. The payment with the extension was made in July of the following year. What the IRS is saying is that you should have made quarterly estimated tax payments during 2019. The federal income tax is "pay as you go." You paid all the tax that you owed, but you didn't pay it soon enough. Estimated tax payments would be on Schedule 3 line 8.
Call the number on the notice if they're not acknowledging the payment that you made. Have proof of payment in your hand when you call and be prepared to send them a copy if requested. A phone call maybe all that is needed however you do have the option to mail in a response and attach a copy of the proof of payment. Either way will work just do it in a timely fashion.
Next time may I suggest that you go online and pay the IRS directly as opposed to mailing them a check. This way you have immediate proof of payment and that it was made timely.
Understood. So now what happens to the $450 that I sent to IRS as a check. How do I get that back? I did not end up owing any taxes for 2019 but I still should get my $450 back. Is there a separate form I need to fill out?
OK ... did the payment with the extension NOT show up on line 10 of Sch 3 ? If it did then you got the credit correctly on the tax return.
If it did not show on Sch 3 line 10 did it show up on line 8 ? If so you did get the credit but on the wrong line ... If that is what happened then review that notice again carefully ... are they telling you the amount was on the wrong line ? The IRS usually figures out these kinds of mixups eventually.
Give the number on the notice a call and let them explain what happened ... ask them about the extension payment if needed.
I am now confused and it appears calling the IRS number is the best solution. When I filed my tax returns, I included Schedule 3, and on line 10 "Amount paid with request for extension to file", I entered $450. However, on CP25, IRS says they have changed "Estimated tax payments, SCH 3 lines 8,10" to $0.00.
So I understand that I paid $450 not as estimated tax payments but as amount paid when I requested an extension for my taxes. Based on my final calculations when I got my taxes filed, I ended up not owing any taxes at all and the CPA said I could expect the $450 as refund.
And that's where I am stuck. I do not owe any taxes at all. Yet, my $450 check got processed. So now, how do I get my $450 back from IRS?
as others have said. call the IRS at the number on the notice. make sure you have a copy of the front and back of the check handy. there is a tracking number on the check which the IRS agent will need.
Ok ...Look at your return ... if you did have the $450 on line 10 and it was not needed then you should have a refund of $450 on the form 1040 line 20. Or did you pay exactly what was needed with the extension so the bottom line zeroed out ? Maybe this CPA could explain this IRS letter to you since he seems to know more than you or us.
OP here to close the loop on this. I called IRS and they acknowledged the error on their part. They said they have made corrections at their end but they wouldn't be sending out a new updated CP25 form. I received the $450 check last week so this case can be closed now.
But here's a shocker!! My mother, when she filed her 2019 taxes, was in a similar situation, and she also received a CP25 two weeks ago! Her story is exactly identical to mine - she also paid $450 when she requested an extension on her taxes but the CP25 is showing that amount on 1040 line 20 as $0. So the tax amount due is shown as $0. And based on the CPA's filing, she should be getting the $450 as a tax refund. She procrastinated on calling IRS but she got the $450 check today. Does she still need to call IRS and get the correction made?
Your mother should not waste her time calling the IRS. She does not have to call. There is nothing that she needs the IRS to do. They have already made the correction and sent her the $450 refund. Case closed.