How to appeal late payment penalty and interest? Do I have to pay interest even if I owe no penalty?

[rishabh1]

I paid my taxes with my extension on Oct 15. I have received a notice from IRS for Penalty and interest on taxes owed since Oct 15.

Per Turbo tax as well as per my calculations through Dorm 2210, I see I don't owe a penalty.

1. How should I appeal the late payment penalty and interest request from IRS? Specifically are there any forms I need to include in my response?

2. Do I still owe interest even if there is no penalty?

[Bsch4477 · Accepted solution]

https://www.irs.gov/payments/penalty-relief

[DoninGA]

Taxes owed on a 2023 federal tax return had to be paid on or before April 15, 2024 to avoid a late payment penalty.  Any tax payment received after April 15, 2024 is considered a late payment subject to penalties and interest.

The extension request to file the 2023 tax return on or before October 15, 2024 is only for filing the 2023 federal tax return, not an extension for payment of taxes.

[Mike9241]

the 2210 only computes underpayment of the estimated tax penalty. Turbotax does not compute the late payment penalty and interest.   you can protest the penalty but you must have a reason that the IRS finds acceptable such as a disaster declaration for your area. in cases like this, where you are not really subject to them, the penalty and interest will be abated. if you have some other reasonable cause the IRS can abate penalties but not interest. As noted the balance due on your return should have been paid 4/15 with the application for extension or through the IRS website. Not 10/15. if you submit a request for abatement and the IRS rejects it, since payment will be even later additional penalties and interest would accrue. if you request abatement send the notice, the reason you believe the penalty/interest should be abated, and any payment to the address in the notice. You may not receive a response for months. use a tracking service so you know the IRS got it. 

[rishabh1]

Why does Turbotax not calculate penalty and interest as described here - https://ttlc.intuit.com/turbotax-support/en-us/help-article/taxation/irs-penalty-miss-april-18-filin... ?

I misunderstood Turbotax output of No "Underpayment Penalties" under "Other Tax Situations" which pertains to penalty for estimated taxes as also including penalty and interest for taxes owed after April 15. Had turbotax provided me the amount as described in link above I could have paid. Hence my question.

[AmyC]

The link you provided, states "Because the IRS applies late penalties and interest on a case-by-case basis, we can't calculate the exact amount if your return is late." This is true and the software can't calculate guesses. If you have a reason for penalty relief, then those penalties and the interest calculated based on the penalties, can be removed or reduced. To see if you qualify, see Penalty relief.