IRS Grants Taxpayers Late-Payment Penalty Relief Due to Delayed Forms

The Internal Revenue Service is giving relief from late-payment tax penalties to individuals and businesses that request a tax-filing extension because they are attaching to their returns any of the forms that couldn’t be filed until after January.

The relief applies to the late-payment penalty, normally 0.5 percent per month, charged on tax payments made after the regular filing deadline. This relief applies to any of the forms delayed until February or March, primarily due to the January enactment of the American Taxpayer Relief Act.

Taxpayers using forms claiming such tax benefits as depreciation deductions and a variety of business credits qualify for this relief. A complete list of eligible forms can be found in Notice 2013-24, posted today on

Individuals and businesses qualify for this relief if they properly request an extension to file their 2012 returns. Eligible taxpayers need not make any special notation on their extension request, but as usual, they must properly estimate their expected tax liability and pay the estimated amount by the original due date of the return.

The return must be filed and payment for any additional amount due must be made by the extended due date. Interest still applies to any tax payment made after the original deadline.

Further details on the tax relief, including instructions for responding to penalty notices, is available in Notice 2013-24.

The affected forms include:

•    Form 3800, General Business Credit
•    Form 4136, Credit for Federal Tax Paid on Fuels
•    Form 4562, Depreciation and Amortization (Including Information on Listed
•    Property)
•    Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth
•    of the Northern Mariana Islands
•    Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign
•    Corporations
•    Form 5695, Residential Energy Credits
•    Form 5735, American Samoa Economic Development Credit
•    Form 5884, Work Opportunity Credit
•    Form 6478, Alcohol and Cellulosic Biofuels Credit
•    Form 6765, Credit for Increasing Research Activities
•    Form 8396, Mortgage Interest Credit
•    Form 8582, Passive Activity Loss Limitations
•    Form 8820, Orphan Drug Credit
•    Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit
•    Form 8839, Qualified Adoption Expenses
•    Form 8844, Empowerment Zone and Renewal Community Employment Credit
•    Form 8845, Indian Employment Credit
•    Form 8859, District of Columbia First-Time Homebuyer Credit
•    Form 8863, Education Credits (American Opportunity and Lifetime Learning
•    Credits)
•    Form 8864, Biodiesel and Renewable Diesel Fuels Credit
•    Form 8874, New Markets Credits
•    Form 8900, Qualified Railroad Track Maintenance Credit
•    Form 8903, Domestic Production Activities Deduction
•    Form 8908, Energy Efficient Home Credit
•    Form 8909, Energy Efficient Appliance Credit
•    Form 8910, Alternative Motor Vehicle Credit
•    Form 8911, Alternative Fuel Vehicle Refueling Property Credit
•    Form 8912, Credit to Holders of Tax Credit Bonds
•    Form 8923, Mine Rescue Team Training Credit
•    Form 8932, Credit for Employer Differential Wage Payments
•    Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit

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Taxpayers Reported Billions in Potentially Erroneous Noncash Charitable Contributions

Approximately 60 percent of taxpayers who claim large-dollar noncash charitable contributions on their returns may not be complying with federal reporting requirements, according to a new report, with potentially erroneous contributions estimated at $3.8 billion in 2010.


The report, from the Treasury Inspector General for Tax Administration, found that the Internal Revenue Service is not ensuring that taxpayers are complying with reporting requirements for claiming noncash charitable contributions. An estimated 273,000 taxpayers claimed approximately $3.8 billion in potentially erroneous noncash charitable contributions in tax year 2010, which resulted in an estimated $1.1 billion reduction in tax.

“Taxpayers can generally deduct noncash charitable contributions made to qualifying organizations during the tax year on their Federal tax returns,” said TIGTA Inspector General J. Russell George in a statement. “However, taxpayers who do not comply with the reporting requirements for noncash contributions could be incorrectly reducing their tax liabilities and receiving tax refunds to which they are not entitled,” he added.

Taxpayers who donate motor vehicles must attach a Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, to their tax returns. However, the IRS is still not effectively identifying taxpayers who are not complying with reporting requirements for donations of motor vehicles.

TIGTA made six recommendations for improvement to the IRS. IRS management agreed with three of the six recommendations, and partially agreed with one.

“We agree with a number of recommendations in the report and continue to make improvements in this area,” wrote Peggy Bogadis, commissioner of the IRS’s Wage and Investment Division. “For example, we agree with your recommendation to clarify reporting instructions provided to taxpayers who are required to complete and submit Form 883, Noncash Charitable Contributions. Additionally, we also agree to expand our procedures used to process tax returns claiming noncash contributions to ensure that we initiate correspondence to obtain missing Forms 8283 and/or qualified appraisals before the applicable charitable contribution is allowed.”

However, Bogadis pointed out that that TIGTA’s analysis of tax return data for 507 accounts identified only 55 returns, or 11 percent, with missing documentation. She noted that Math Error Authority is limited by the Tax Code, so the majority of cases that were identified do not fall under the IRS’S Math Error Authority and need to be addressed through deficiency procedures.

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