Underpayment Penalties

[jainen]

be consistent

Doesn't the IRS have a policy that they won't collect extra tax if you self-assess too low? Just to be consistent.

[Bees Knees]

The IRS had enough information to know the taxpayer overpaid his or her tax. The tax preparer did not know about this extra payment and filed the return as if there was an underpayment plus penalty. The IRS refunds the overpayment, but refuses to refund the self assessed penalty even though it is clear the penalty is unjustified.

That is a textbook definition of being jerks.

[veritas]

The magic number is.......

Some years ago while attending a seminar led by IRS personnel the question of under payment of estimated tax penalties arose. While the IRS would not officially give the number it was discerned that it is $100. Anone paying a penalty under this amount is throwing good money down a rat hole. Keep in mind the balance due for the tax return must be paid timely.