Underpayment Penalty Interest

[RWG1950]

My customer's 2019 return shows an amount owed of about $1,400, which includes a $4 underpayment interest penalty.
Nothing I do on the 2210 eliminates the penalty. The customer would prefer to pay the $1,400 closer to July 15 if possible.
Is the interest meter still running on the underpayment amount or has it now been waived or frozen until July 15 ?
If she's going to keep accruing the interest penalty it might be better for her to file & pay up now.
Thanks for comments

[Rapid Robert]

I've seen same question asked elsewhere, but I can't provide a cite, sorry. However, I am pretty sure the underpayment of estimates interest clock stopped on 4/15 like it always does, even though the actual balance due date was extended. So 3 monthsminterest free loan on $1,400, in your case. A common sense way to look at it is that the calculation and payment of estimates is on an annual cycle, just like the tax return itself, so to make the Form 2210 calculations based on 15 months instead of 12 makes no sense.

When I have time, I may also check IRS draft forms/pubs site to see if a draft revised Form 2210 for TY2019 has been posted. If they don't update the form, how can they collect the extra amount?

[Maude Lebowski]

The underpayment penalty has nothing to do with the April 15th deadline. It is imposed when taxpayers do not pay enough during the tax year: https://www.irs.gov/taxtopics/tc306. Generally, it will be the same amount whether the return is filed on time, during the extension period, or even beyond.

[Rapid Robert]

The underpayment penalty has nothing to do with the April 15th deadline. .

That is ONLY correct if the Short Method on Form 2261 is used (Part III). See this note on the form regarding use of the Short Method, which ignores the date on which the balance due was actually paid.

"Note: If any payment was made earlier than the due date, you can use the short method, but using it may cause you to pay a larger penalty than the regular method. If the payment was only a few days early, the difference is likely to be small."

Note from that according to the underlined portion, that making a payment before the due date does make a difference to the calculation, but the Short Method does not capture that difference.

Using the Regular Method, Part IV of the form, the date the balance due is paid, if prior to Apr 15, absolutely does make a difference, so Apr 15 has EVERYTHING to do with calculating the underpayment interest charge in a manner most favorable to the taxpayer. Once Apr 15 is reached, the Regular method no longer adds any additional underpayment interest charge (which was the question asked).

[Rapid Robert]

fussing with a $4.00 Form 2210 penalty

The question was actually about $18 of underpayment interest, which would be the charge at 5% for 3 months on $1,400 balance due, it it were calculated from Apr 15 through July 15. My first answer said it would not be calculated for that period. (We don't know the interest rate that kicks in on July 1st yet, but I assume it will be close to if not exactly 5%).

I'm sure you would agree that $18 is a slightly less "fussy" amount than $4. I could get a nice lunch and beverage for $18, so if you think it's de minimis, let me know and I'll send you donation link! :-)