Global Courant
The phones of tax specialists across California have been ringing red this week.
On Tuesday there were five – and the next day five – at the office of chartered accountant Tyler Ashmore in Bakerfield. Also on Tuesday, 15 customers called the business line and the personal number of Dan Herron, tax advisor in San Luis Obispo. That same day, about a dozen phone calls and emails arrived in the inbox of David R. Flamer, a CPA at Agoura Hills.
An untold number of California taxpayers — believed to be in the hundreds of thousands — were recently sent notices from the Internal Revenue Service stating that the income taxes they owed were due in three weeks instead of the roughly four months the agency previously promised. The agency sent a digital notice to those taxpayers this week, apologizing for its mistake and confusion.
“The IRS is assuring California taxpayers that they have an automatic extension until later this year to file and pay their taxes for those covered by disaster declarations in the state,” the agency noted in statement on Wednesday.
Notices, called CP14, are intended for “taxpayers who have an outstanding balance, and they are sent as a legal requirement,” according to the IRS.
The agency did not respond to calls or an email from a Times reporter for further comment.
The Tax and Customs Administration granted private and business tax deferral in January to those in areas affected by “severe winter storms, flooding and mudslides in California” last year. The extension applied to 51 counties, including Los Angeles, Orange, Riverside, San Bernardino, Santa Barbara and Ventura.
Due dates have been changed from May 15 to October 16.
However, the CP14s received this week stated payment terms within 21 days. That meant those expecting to pay off their debt were mistakenly seeing their timetables cut from four months to the end of June.
“The hardest thing for tax professionals is the work that isn’t ours,” said Ashmore, who added that he spent 20 to 30 minutes explaining to each client what was happening. “Part of my job is easing their fears, which when you work with the IRS comes naturally.”
The CP14 notice can range from a few to several pages with a first page showing a statement balance and due date. The IRS noted that all letters sent included a “special attachment” stating the stated payment date “does not apply to those covered by a disaster declaration.”
That appendix could easily be skipped or ignored, argued Herron, San Luis Obispo’s tax advisor.
“There’s nothing on the front page that indicates the IRS knows this person was affected by a flood,” he said. “All my clients think is, ‘I have to pay this bill in June,’ which can be quite a large amount for some.”
For his part, Ashmore, Bakersfield’s accountant, said his clients’ tax debts ranged from $50 to $50,000, while Herron said most of his clients had four-figure bills.
Herron said the IRS’ posts sparked a fervor on tax-prep social media, including #TaxTwitter, where CPAs complained about the government’s blunder.
“One of the big problems with this message is that my people don’t have two to three hours to call and wait to speak to an IRS agent when they get these messages and get scared,” said Flamer, Agoura’s CPA Hills. “These baseless letters caused unnecessary fear.”
Ashmore said he was faxing a letter to the IRS on behalf of his clients letting the agency know his clients are eligible for renewal, while Flamer and Herron are telling clients to ignore the letters.
“I told my people to send me a copy of the notice and not worry about it,” he said. “They have until October 16.”
The IRS was clearly concerned about being inundated with calls from taxpayers. In the last line of its apology sent Wednesday, the agency advised that “taxpayers who receive letters should not call the IRS or their tax advisor.”
