Tax and financial advice from the Silicon Valley expert.

Disaster victims should respond to IRS late-filing and late-payment letters

The IRS has updated its guidance for taxpayers with extended due dates for 2022 tax returns and payments as disaster relief. This includes most California taxpayers.

The IRS has updated its instructions to taxpayers, CA-2023-1, to state that taxpayers who receive a late filing or late payment penalty notice when the filing extension applies should call the telephone number on the notice to have the IRS abate the penalty. Doing this should stop collection action by the IRS.

The IRS has been mailing notices notifying taxpayers that their tax returns or payments are late and that penalties may apply when the due dates have been extended, so penalties shouldn’t apply.

In most cases, the IRS will automatically identify taxpayers located in the a covered disaster area and shouldn’t send late filing or late payment notices to them. Some taxpayers who qualify for disaster relief live outside the disaster area or have a business located in a disaster area. Sometimes, a taxpayer who lives in a disaster area and qualifies for relief might “slip through the cracks” and be mailed a notice.

It’s good personal and business policy to always respond when you receive an IRS notice.

If you have questions about this matter or need help preparing your response, see your tax advisor.

Tax and financial advice from the Silicon Valley expert.