IRS Notice CA-2023-01 automatically qualifies you for any "late payment" penalties waiver if you live in the affected counties but I don't think it provides any "underpayment" penalties waiver unless the penalties are solely caused by the 2022 4th quarter estimated tax payment.
Underpayment penalties are accessed when there are insufficient withholdings or estimated tax payments throughout 2022. The only exception is the 4th quarter estimated tax due on Jan 17, 2023. Late payment penalties are payments due April 15, 2023 but not paid (until Oct 16, 2023).
IRS erroneously sent out late payment penalties notices earlier to qualified Calif residents earlier this year. They have since apologized for the erroneous notices. If you received one of those notices, you need to contact the IRS. Here's an announcement by Spidell:
Do not ignore all IRS notices related to disaster postponements (06-16-23)
The IRS has updated their California disaster related postponement notice (CA-2023-01) to clarify that taxpayers should not ignore late-filing or late-payment notices, even if they qualify for the disaster-related postponement relief.
The notice states that if a taxpayer receives a late-filing or late-payment penalty notice from the IRS that has an original or extended filing, payment, or deposit due date that falls within the postponement period, the taxpayer should call the telephone number on the notice to have the IRS abate the penalty.
These late-filing or late-payment notices should be distinguished from the CP14 balance due notices that were automatically sent out earlier this month. As the IRS previously announced, the CP14s were sent out as a legal requirement when the originally scheduled due date had passed, to inform taxpayers that they had 21 days to pay. But that 21-day period did not apply to those who qualify for the disaster-related postponement and the IRS stated those notices can be ignored.
However, late-payment or late-filing notices should not be ignored. Taxpayers or their tax professionals should call the number on the notice and explain that the taxpayer qualifies for the disaster postponement relief.
