Debit Payment cannot exceed tax before penalties and interest
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I'm filing an extended 1040 with balance due plus late payment interest and penalty. The program (Federal Information Worksheet - Part V) will not allow electronic funds debit to exceed tax due... i.e "Federal Information Worksheet: Debit amount should not be greater than balance-due amount before late filing penalties, late payment penalties and interest." So my client still has to send a voucher and check payment for the P&I? This doesn't make sense and is an inconvenience. Am I missing something? Thanks for help.
Answer
I chatted with Craig at ProSeries support as follows:
Larry: I put this on the forum yesterday, but I haven't received a response. If you tell me if there's a resolution or not, I will post your response there. Thanks.
Craig: That is correct, the Electronic Funds Withdrawl only withdraws the tax due, with the P&I being sent by mail.
Larry: Is this law, or a program restriction?
Craig: Allow me to check, one moment please
Craig: This appears to be an IRS requirement on our program
Larry: Hard to believe a IRS requirement, but OK, thank you very much. Bye
Craig: sorry for the inconvenience
Craig: Thank you for visiting ProSeries Live Chat. Please feel free to visit us again for any further assistance. Goodbye
Answer
The P & I worksheet is not an official form that is attached and which would give the bank the authority to take that payment. I would note that my Proseries worksheet said the late payment penalty would be 3.5% if the payment were made on the 16th thru authorization, while the software program Tax Interest says the penalty would be 3%, seeming to recognize that the deadline is the 16th.
Answer
I would venture to guess that this is because the IRS I&P may have changed by the time the client pays the bill. anuenue
