Hello there! Ordinarily I plan to update the blog weekly or thereabouts, but this close to the January 15 deadline for estimated tax payments among other things, thought it was worth a quick note. It's no secret that COVID has created massive backups within the IRS. With that in mind, if you're mailing estimated tax payments to the IRS or state taxing authorities my suggestion would be to send those certified mail with return receipt. Full disclosure, I've heard on occasion that the postal service sometimes says the IRS won't sign for those. I can't give an ironclad "every time" kind of voucher but will say I have in my possession two signed "green postcards" verifying the IRS received the items that were mailed. Why do this? It's obviously hard to predict the future, but if the IRS processes estimated tax payments weeks after the payments were mailed, it would seem logical that the IRS might decide penalties for late payment would apply. It's awkward when a taxing authority decides a document/payment was filed late and we, the taxpayers, can't provide evidence to the contrary. Certified mailing just provides some backup showing yes, the payments were timely mailed. I did have a situation years ago where a state taxing authority was auditing a client (before electronic filing days) and said "ooh, we don't have their 20XX tax return (roughly 2-3 years previously). So they'll owe a penalty for that." The client was a person who was very much on top of things so I asked the auditor "If I provide you with a copy of the certified mail receipts will that make this whole penalty thing go away?" The auditor said yes - the client provided the certified mail receipt and the penalty disappeared. If you and I have a conversation about this sometime... there is a 'rest of the story" but for now, yes it was very much 'lesson learned' that having proof of mailing is important. Have a blessed week!
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