payment made on line went to 2021 vs 2022

[Pacun]

I prepared 2022 taxes and I said to taxpayer: You owe, $2,800. I can have the IRS take that money from your bank account on April 10. He said, I won't have that much but I will have $1,500. I said make sure that that amount is in the account that day.  In may, he requested and appointment because the IRS sent him a letter stating that the account had NSF when the IRS tried to collect the $1,500 portion of the debt.  He told me that he had proof that the bank paid that amount and he wanted to show me. I met with him on a Saturday.  He showed me the letter and he showed me the bank statement. In one line, the bank had a payment for $1,500 to IRS and the very next line had a credit for $1,500 showing the NSF rejection. I told him that there was no money in the bank to pay the IRS and that's why he got the NSF letter. At the same time, I said, the total debt is more than $2,800 so pay that amount as soon as you can.  He went on line and paid $1,500 not the total amount due. 

By the way, checking his bank account balances for two months, he only had about $500 max. How did he expect the bank to pay $1,500 if at not point the bank had more than $500.
A couple of weeks later, he got a bill from the IRS for $3,200. He texted me again and said what was the exact amount he owed because I never told him he owed more than $3K.  He also sent me a picture of a payment for $1,500 that he made. I checked the payment and I noticed he made a mistake by selecting tax year 2021.  He wants an appointment with me but there is not much that I can do, except telling to pay the IRS the full amount and deal with the $1,500 later. 

How can I help him to get his money transferred from year to year? That doesn't seem to be a simple task that a person on the other side of the phone will be able to make, correct?

 

[jklcpa]

Did he eventually have enough in the bank account for the $1,500 that supposedly went toward 2021?  If he did, then eventually the IRS should refund that money, but who knows when.  Then again, it is possible that IRS will keep the money since he is getting notices. Maybe it is worth a call to the PPL to ask an agent to reclassify that payment to the proper tax year. Client may be out of luck on that though.

[Pacun]

Yes, after my May meeting with him, he went on line and paid.  I will call the practitioners hot line to see if they can help.

[Lee B]

Your client should be able to call and get this moved, supposedly wait times aren't too long right now.

If it was my client I wouldn't call for them.

[mcbreck]

I called the PPL 4x last week and the longest wait was 19 minutes and they called me back in a very timely manner. The other three times I had immediate access. All 4 calls were exceptionally pleasant.

[Terry D EA]

Pacun,

I had a similar scenario. Client made an estimated payment for 20k to be applied to the 2022 tax year in Feb 2023. The filing time was extended due to NC being claimed a disaster area due to Hurricane Ian. The IRS did not provide a means to properly route the estimated payment to the proper year becasue of the filing extension. Calling the PPL, first agent said no problem and supposedly put in motion to move the funds from 2023 to 2022. Called back 3 weeks later and was told that the PPL agents did not have authority to move the funds and that everything I was told was not true. Good thing I recorded names and agent ID's The agent went to their supervisor and after they realized this was their mistake, made an exception and correctly moved the funds. Because your client made the error, they may be less than cooperative. Be ready to apply for a refund for the overpayment for the wrong year that was used. Personally, I would require payment to help this client. It is not your error, they can pursue it themselves or pay you to do it with no guarantees. I would tell the client to get his mess straightened up, pay what is owed and then work to get the overpayment, if any, back. They may have already applied the overpayment to what he owes. If that is the case, then tell him to pay the balance and move on.