The IRS has stated that they are behind in withdrawing funds for first quarter estimated tax and extension payments made through auto withdrawals on or around April 15. This is why many practitioners have been notified by their clients that April payments have not been withdrawn from their accounts though the payments were properly scheduled. According to the IRS, this is not a tax software issue. It is the IRS who has been delayed in making the withdrawals from taxpayers’ accounts, and they are making the issue a priority. The problem is not just estimated taxes but all auto withdrawals made on or around April 15.
According to the IRS, there will not be any penalties for these late withdrawals, and no action is required by the taxpayers. The IRS is expected to release a Quick Alert on this topic soon.
We will have more details on the IRS release in the next issue of Spidell’s Federal Taxletter®.