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Form 2210 penalty - letter but no change

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    Form 2210 penalty - letter but no change


    Why does IRS send a notice CP25??? "We made changes to your return because we found a difference between the amount of estimated tax payments on your tax return and the amount we posted to your account. You're not due a refund nor do you owe an additional amount because of our changes. Your account balance is zero."

    But it's a lie -- they didn't make any changes to the return and they didn't find any difference in the amount of estimated tax payments (zero). This is a return that correctly calculated $245 Form 2210 amount which was paid with the balance due.

    Client gets this notice and of course has to contact me, thereby stealing time from each of us, as well as wasting government time and money.

    Meanwhile, on my own return I got a state tax paper refund check for $9 equal to a correctly calculated and reported equivalent penalty on the state return. Why bother with the form if they don't want you to calculate and pay the penalty?

    Sure, we could file returns without calculating underpayment of estimated tax penalty, but then I'm sure they would send a letter and a bill for it!

    Email I received from a client regarding odd IRS letter

    I agree this is a waste of our time and it can affect the trust our client has in our accuracy.

    I received this email from a NEW clinet. The amount shown is their total tax for the year. It was paid through W-2 withholding and a check sent with the return. They paid no estimated taxes at any time during the year.

    From Client:
    Hi, you did our taxes this year and we just had a question on a letter we received from IRS.

    It says:

    We adjusted your estimated tax total

    taxes you owed $23,694
    payments you made $23,694

    Does this just mean they accepted our tax payment? Not clear on why they sent this to us.
    Last edited by dmj4; 05-18-2018, 10:06 PM. Reason: added a few words


      These letters are form letters and the person who inputs them selects certain paragraphs to insert. They often pick the wrong paragraph number and the letter makes no sense. If it says they don't owe anything and there was no change, just ignore.