Don't Mess With Taxes

Electronically paying bills, both due private accounts and public ones like tax agencies, has become a no-brainer for millions of us. But as the saying goes, technology is great until it isn’t.

That not so great situation recently reared its frustrating head.

Personally, an automatic electronic payment I’ve had in place for years went haywire this week.

But my payment problem was minor compared to other e-pay devotees across the country. They recently found themselves dealing with another, more distressing and potentially more costly governmental glitch.

The Internal Revenue Service has been having problems with some taxpayers’ e-payments, prompting these compliant taxpayers to get unwanted tax notices.

Personal and public e-pay issues: At least my personal payment issue is a charitable donation, not a bill where a late or wrong payment could create more financial problems.

According to the email I got today from the nonprofit, some monthly donors were charged an incorrect amount, while others saw their donations show up on a different day than previously scheduled.

The charitable organization assures all us affected regular e-paying donors that it is “working with our vendor to address the problem as quickly as possible. We will update you with more information and how the error will be corrected as soon as we know more. There is no need for any action on your part at this time.”

However, some folks who find themselves affected by the IRS’ problem in processing some electronic payments didn’t get such reassuring words from the federal tax agency.

Instead, as the IRS acknowledged today in an online statement, these taxpayers received (and some are still getting) tax notices indicating a balance due even though they made on-time payments.

Affected taxpayers: The IRS says individual taxpayers who electronically paid tax reported due on their recently filed returns may see payments on their accounts as pending, although the IRS has received payment through their banking institution.

How did this happen? The tax agency says there are two possible explanations.

The 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.

No action needed: The IRS did, however, follow the same nothing-needed-now route taken by the nonprofit that’s dealing with my (and other donors’) erroneous e-payments.

The tax agency is telling taxpayers who receive a notice, but who paid the tax they owed in full and on time electronically, that they do not need to respond to the notice at this time.

The IRS also notes that any associated penalties and interest will be automatically adjusted when the payment(s) are applied correctly by the tax agency.

“For affected taxpayers, the IRS apologizes for the inconvenience this delay in processing your payment has caused,” added the agency in its statement.

Keeping an eye on your account: If you’re like me, you’ll want to know exactly when the IRS properly credits your timely tax payment.

The best and easiest way to do this, says the IRS, is to open an online taxpayer account if you haven’t already, and check it periodically.

With an online account you can monitor the status of your payments in the payment activity page, as well as check pending payments that are being processed, and your prior payment history.

If you checked your online account and do not see your electronically submitted payment there, be patient. If your e-payment isn’t processed by July 15, then call the number on the nonpayment notice you received.

Eye on 1040-ES payments, too: Finally, not to issue an alert before there’s a problem, but hey, I’m a worrier. And the second 2025 estimated tax amount due date is Monday, June 16, with millions of us making those payments electronically.

I use the Electronic Federal Tax Payment System (EFTPS), and the process has been, well, automatic for decades.

And there’s no indication that whatever caused the IRS problem with earlier e-payments will affect upcoming electronically paid 1040-ES amounts.

But, like I said, worrier. You can be sure that I’ll be double (and triple or more) checking next week, both at the EFTPS site and my taxpayer account, to ensure that the IRS got and recorded my June 16 payment, as the agency says, timely.

You also might find these items of interest:

• Ways to electronically pay your tax bill
• Got a letter from the IRS? Take these steps.
• A friendly tax nag reminder: Don't miss June 16 estimated tax due date

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