Level 2

Underpayment penalty calculation

Forum|Forum|1 year ago
May 21, 2025
4 replies
20 views

Is anyone else experiencing a rash of notices where the IRS is reducing or eliminating the underpayment penalty calculated with Lacerte? I have quite a few clients and some are not happy that they paid it in when they didn't have to. Of course I called Lacerte and they said "no one else has reported any issues" but I just don't believe I'm the only one. I believe this is a calculation error in our software.

IRonMaN

Level 15

Same issue with ProSeries. Sounds like the IRS is just being generous 😀

Slava Ukraini!

abctax55

Level 15

Generous? or AFU?

HumanKind... Be Both

I

Intuit_Ruben

Level 7

@IRonMaN @vkatranis Do you have a screenshot of the notice being received? I'll take a look. Thanks!

IRonMaN

Level 15

@Intuit_Ruben - I am working out of town this week so I don't have a copy of the notice handy. It was a brief explanation saying that they corrected our incorrect calculation but it also did briefly make a mention to disaster areas, but none of my clients were located in a disaster area. I kinda wondered if the IRS computers went rogue and are incorrectly adjusting for disaster areas that don't exist.

Slava Ukraini!

BobKamman

Level 15

@IRonMaN After June 2024 floods in Minnesota, more than 20 counties were declared eligible for federal disaster assistance. You don't have clients in any of them? Maybe IRS figured they would just include the whole state.

The Presidential Declaration was issued for public assistance on June 28, 2024, and was amended to include individual assistance on July 29, 2024.

The initial declaration approved public assistance for Blue Earth, Carver, Cass, Cook, Cottonwood, Faribault, Fillmore, Freeborn, Goodhue, Jackson, Lake, Le Sueur, Murray, Nobles, Pipestone, Rice, Rock, St. Louis, Steele, Wabasha, Waseca and Watonwan counties.

The amendment made federal funding available for individual assistance and U.S. Small Business Administration loans in Blue Earth, Cook, Cottonwood, Faribault, Freeborn, Goodhue, Itasca, Jackson, Lake, Le Sueur, Mower, Nicollet, Nobles, Rice, Rock, St. Louis, Steele, Waseca and Watonwan counties.

BobKamman

Level 15

Are the taxpayer addresses in a federally declared disaster area? This happened last year, also, to preparers who didn't know about the extensions or exemptions granted for making ES payments.

J

JACASTRO

Level 2

We are seeing this issue this year for 2025 tax filings. it has been reported by Ultra tax users as well. IRS underpayment penalties are being reduced and there has been no federally declared disaster in our region.

BobKamman

Level 15

What region would that be?

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