Tax penalty since 1st notice??

Question

I received a "proposed change" to my 2005 taxes. It included additional tax, payment decrease and interest charges. It contained an amount due if paid by 7/25/2007.
I paid that amount and the check cleared on 7/20/2007

I received another notice saying I now owe a "penalty for late payment since prior notice" of my original taxes 15months @ .5%.
why wouldn't this have been included on my original notice?
Do I owe this, especially since I paid the full amount they originally said I owed by the date they said?

so dam* frusturated

Answer 1

That is certainly very frustrating. It looks to me, however, that your first notice included "interest" and your second notice said "penalties". Those are two different things. You can call them or even try to fight it, but I say pay it and move on and get the IRS off your back.

Answer 2

Call 1-800-829-0922 or 1-800-829-8374 and the payment was received and when and if you have a balance due.
Sound like the notice got cross in the mail. And you received a proposed change on you 2005 taxes because you didn't report all your income or something was reported incorrectly.

Answer 3

The penalty adjustment is probably the result of the decrease in payments. (I don't know what that was, but am guessing it was earned income credit.) This means that IRS has figured late payment penalty from the due date of the return on that part of the liability. Since the penalty was not included on the proposed adjustment, I suggest calling IRS and requesting it be waived since you did not have an opportunity to contest it.

Answer 4

Call the number on the second notice and discuss it with them. It is not unusual for these things to cross in the mail. Let us know what they say.