If you’ve lived in California for more than a year, you probably are aware of the damage caused by the massive amount of rain we received this past winter (and continue to receive even now into the spring). You probably also heard that because of the rain, most Californians were given an extended due date to file and pay their federal taxes for the 2022 tax year. This extension allows California taxpayers to wait until as late as October 16, 2023, to file and pay their 2022 income tax returns. The extension also applies to other taxes that may have been due between December 27, 2022, and October 16, 2023, such as installment plan payments for other tax years, estimated tax payments for both individuals and businesses for 2022 and 2023, and payroll taxes (among many others – you can find a list here and here), as well as to perform certain tax-related actions, such as making deposits to individual retirement accounts (IRAs).
Many taxpayers have taken advantage of this extended deadline and continue to do so. What if you already filed your tax return for 2022 and had a balance due that you couldn’t pay when you filed? You thought you would be okay so long as you paid up by October 16, but you may have recently received a letter from the IRS called a CP14. This letter probably told you that your tax return had been received but the balance remained unpaid, and that you needed to pay the amount due within 21 days or face accumulating interest and penalties.
But is this letter correct? Yes and no.
If you didn’t pay the balance due with your return, the amount shown as due on the notice is probably correct. However, the extension to pay until October 16, 2023, is still in effect for most California taxpayers, so the statement about having to pay within 21 days is
not correct. Very likely, in addition to the CP14 letter, the envelope also contained a special insert that notes that the payment date listed on the notice does not apply to taxpayers who are covered by a disaster designation. You may be asking why they are sending you a letter if they know it doesn’t apply to you?
The simple answer is that the IRS is required to send out these notices to any taxpayer who has filed a return and has a balance due that has not been paid. These notices are sent out automatically but may not be applicable to everyone who gets one. The IRS apologized for any confusion in a
post on their website on June 7, 2023, stating that California taxpayers who receive one of these notices do not need to pay until October 16, 2023, and
you do not need to call the IRS or your tax professional regarding the notice. This also means that you do not need to report these notices to TaxAudit as per your membership agreement.
That’s probably a relief to our members, knowing they still have several months to pay off their balance. Keep in mind that if you receive any other IRS or state tax agency notices, or if the IRS assesses additional penalties and/or interest after you have paid your balance due before October 16, the tax professionals here at TaxAudit stand ready to assist you!