If you submit your tax return online and mail in a payment by April 15, is your tax payment considered late? NTUF recently helped a taxpayer in this very situation. We asked the taxpayer to call the IRS about this issue, and the agent responded that many taxpayers were receiving penalty notices if they mailed their tax payments but electronically filed their returns on or before April 15.
Generally, the mailbox rule protects taxpayers in this situation. The mailbox rule states that the date stamped on the United States postmark is considered the date of delivery. For example, if a taxpayer mails her tax return via U.S. mail on April 15 but the IRS does not receive the return until April 23, the mailbox rule requires that the IRS consider the return timely filed because it was postmarked on April 15. The IRS also does not discriminate whether the filing was done electronically or through U.S. postal mail. As long as the return or payment is sent through an approved electronic return transmitter, it is the electronic postmark date, not the day the submission is received by the IRS, that determines the date of delivery.
The mailbox rule’s language is clear. So why are some taxpayers still receiving late penalty notices when they electronically file their return and mail their payments on or before April 15? The simple answer is the IRS’s slow processing times.
On June 12, 2024, the IRS issued a notice that taxpayers are receiving a CP14 Balance Due, No Error notice indicating they have a balance due although these taxpayers have already paid. The agency explained this is happening because “[T]he notice may have been initiated before the payment was processed on the account, or the payment may have been processed but contained errors and requires additional handling to address the error before updating the tax account.” For the time being, the IRS is advising taxpayers in such a situation to ignore the notice and penalties, as any errors will be remedied “when the payment(s) are applied correctly by the IRS.”
We are happy about the small part we played in helping taxpayers get answers, however this situation is frustrating for taxpayers. Although these taxpayers are complying with the law, the IRS’s inability to process tax returns is causing taxpayers to receive faulty penalty notices. Not only does this cause stress amongst taxpayers, but it also decreases trust in the agency. The IRS needs to prioritize customer service and processing returns efficiently to avoid these issues and protect taxpayers.