There could be several reasons why you received a notice from the IRS regarding an underpayment or late penalty. First, ensure that the IRS has accurately recorded all the payments you made and applied them to your account. Additionally, verify that the correct amount of payments were reported and matches the actual payments made.
Below are a few reasons you may have received the notice.
- The payments reported on your return or reported as paid in Heard were not actually paid, causing the IRS to issue an underpayment notice due to the missing payment.
- The IRS didn't credit the payment in time before the notice was sent out.
- The IRS is missing payments on your account.
- The estimated tax payments were not paid on time.
Let's also clarify what a tax extension means: The standard tax extension allows you to file your tax return after the usual deadline. However, it doesn't buy you more time to pay any taxes you may owe. That means that if you don't pay your tax balance by the filing deadline, you'll be subject to penalties and interest.
The penalties are not a result of late filing on Heard's part but due to underpayment of taxes. The payments include quarterly tax estimates that Heard provided during the tax year, which contributed to the underpayment penalties you are receiving now.
Unfortunately, it's not uncommon for the IRS to make adjustments after your return is received due to any underpayment penalties and/or interest that was not accounted for during tax preparation.