Making a Tax Payment Using EFTPS or Phone

Under some circumstances in which the tax years overlap the calendar year, there seems to be some confusion about which “Tax Period” to use. When making a corporate tax payment to the IRS using their Electronic Funds Transfer Payment System, either by phone or on the IRS’ website,   the correct year is always the tax period in which the corporation’s fiscal year ends.  For example, if a corporate taxpayer’s fiscal year begins February 1, 2018 and ends January 31, 2019, the correct tax period would be 2019.  Using this example, if the payment is inadvertently posted to 2018, you are allowed a 24-hour window of opportunity to correct the misapplied payment. To make this correction, you must call the IRS directly to request application of the payment to the correct year.  

Please keep in mind that unless you reach out to the IRS within this window of opportunity, the IRS will not apply a misapplied tax payment to the correct year which will almost certainly lead to a series of IRS letters requesting payment and issuing penalties and interest for not filing tax payments according to the regulations.   

If you end up on the receiving end of this series of IRS correspondences, please send all IRS notices to our attention. We will draft an appropriate response to the IRS to remedy this situation and may still be able to get your payment applied to the correct tax period and hopefully, an abatement of penalties and interest.