e-file later or mail now pls? comment? 2022

[WITAXLADY]

I am finishing 2022 income tax returns - do I mail them in now or wait until Jan 23rd or so when e-file reopens to file these?

 

Which will take less time?

What about 2020 and 2021's?

Thank you,

Darlene

 

[Lion EA]

In the same boat, but some owe. I'm giving clients a choice between mailing now or waiting until January to e-file. HOWEVER, I'm telling them to PAY NOW via IRS's DirectPay and the state's versions, so they have immediate confirmations of their payments.

I'm open to better suggestions...

[Catherine]

I am recommending payments NOW (whether via coupon-and-check, or Direct Pay), and e-file later. 

[Lloyd Hudson]

I have become a big fan of direct pay, after several cases of "missed " postings or "un-identified " deposits. I am not a fan procrastinting payment. And, I also agree with postponing filing awaiting e-file. E-file more positive than "human" . YMM

[Terry D EA]

I'm working on a case where filing past year(s) by mail is required. This is due to a missing EIN for the firm on form 8919. yes, everything under the sun was tried to get the EIN so we ended up with the word "UNKNOWN" which prevents the return from efiling. I've told the client to wait until we know the IRS has received the return(s) and then use the direct pay to pay the balance due. Would it be better to have him pay what is due now for the remaining years? By this discussion, it sounds like a better idea to do so.

[Catherine]

1 hour ago, Terry D EA said:

and then use the direct pay to pay the balance due

Have him pay the balance due now. Stops further penalties and interest from being added to the balance. 

[kathyc2]

18 hours ago, Catherine said:

Have him pay the balance due now. Stops further penalties and interest from being added to the balance. 

Does full late payment stop late filing penalty? 

[Lee B]

35 minutes ago, kathyc2 said:

Does full late payment stop late filing penalty? 

No it just stops late payment penalties.

[Catherine]

On 12/10/2023 at 10:25 AM, kathyc2 said:

Does full late payment stop late filing penalty? 

As Lee B said, it does not stop the late filing penalty. But it does stop interest after the payment date (on the tax).

[DANRVAN]

1 hour ago, Catherine said:

As Lee B said, it does not stop the late filing penalty. But it does stop interest after the payment date (on the tax).

And you don't want the smoking gun pointed at you when client gets extra months of late filing penalties due to waiting to efile on an unknown date in January. 

My advice is to file by mail ASAP, don't sit on it.

[DANRVAN]

On 12/9/2023 at 12:56 PM, Terry D EA said:

. I've told the client to wait until we know the IRS has received the return(s) and then use the direct pay to pay the balance due. Would it be better to have him pay what is due now for the remaining years? By this discussion, it sounds like a better idea to do so.

I believe it is best to advise the client to pay as soon as you determine the liability if they wish to minimize interest and penalties.

[Catherine]

16 hours ago, DANRVAN said:

And you don't want the smoking gun pointed at you when client gets extra months of late filing penalties due to waiting to efile on an unknown date in January. 

My advice is to file by mail ASAP, don't sit on it.

For that very reason, I recommend waiting until e-file opens again. That paper-filed return could very well be officially received, and then processed, long after e-file re-opens. Then the smoking gun gets pointed at you for not e-filing. 

Or, give the client the two options, and let him decide. But get his decision in writing ("Option 1" "Option 2" checkmark and signature. Make sure the possibility of delay and penalty is listed on both options.)

[DANRVAN]

30 minutes ago, Catherine said:

That paper-filed return could very well be officially received, and then processed, long after e-file re-opens. 

The return is considered filed on the date it is postmarked, regardless of when it is actually processed.

If the return is e-filed after January 15th, there is two additional months of late filing.  

34 minutes ago, Catherine said:

Then the smoking gun gets pointed at you for not e-filing. 

Why would that be an issue?

[Catherine]

19 hours ago, DANRVAN said:

The return is considered filed on the date it is postmarked, regardless of when it is actually processed.

It is supposed to be. We've seen plenty of returns "filed" weeks and even months after the postmark (as shown on transcripts). Even some where client was told by IRS to e-file as their paper-filed return was lost. Yes, they have now "fixed" all those issues. And I have a bridge to sell you.

Keep in mind, this is not my decision to make, but the client's. I give the client the options and let them decide (and document that). I do recommend waiting to e-file. In the cases I've done that, the return is already late, and e-file re-opening is less than a month, rather than more than two months.

[DANRVAN]

40 minutes ago, Catherine said:

Keep in mind, this is not my decision to make, but the client's. I give the client the options and let them decide (and document that).

That is the key.

 

41 minutes ago, Catherine said:

In the cases I've done that, the return is already late, and e-file re-opening is less than a month, rather than more than two months.

If filed by Dec 15, the return will be two months late from the extended due date.  If filed after Dec 15, three months.  If e-filed after Jan 15 four months, so the late penalty increases from 10% to 20% between now and then.

Even though there  might not be any penalty because there is zero tax due, that could change if there was unreported income, or denied credits or deductions.

The return is now eight months past the normal filing date.  They can wait a little longer for a refund if that what it takes; I am not sitting on unfiled returns for 30+ days for a number of reasons.  

[Terry D EA]

I too question the mailing, post mark and actual processing. I know the post date is supposed to be the official filing date. I send everything certified mail and keep all receipts with the stamped post date. It has worked in the past when an IRS agent accused me of not sending a check back to them and insisted they never got it. I faxed in copies of the green card showing the signature and the receipt with the post date. Never heard anything again about they as they miraculously found the check. Imagine that, harass first, then look for it.

BTW- efiling with a DCN number, transmission number whatever you call it doesn't always satisfy some states. I had a go round with NC where they claimed they never received the client's return. The agent from NC said the DCN number meant nothing and didn't prove anything. After arguing a bit, they caved and asked for a copy of the return but still denied the client their refund based on the statute of limitations had expired to claim a refund. Client gave up the fight. I was more than ready and willing to keep marching on.

Short summary, nothing is guaranteed. 

[Catherine]

21 hours ago, Terry D EA said:

doesn't always satisfy some states

The EF ack saying "received by stateDOR on date x" sent out by their own computer systems isn't accepted? That one I'd fight, for sure.