Discussion:Tax payment after extension & SSNs

Client is now worried about penalties and interest and wants to send the other $200k.

If you were advising the client, would you just have her send the additional amount with a 2007 4th Quarter Voucher, a revised 4868, or merely send the check with proper identifying information and noting "2007 Form 1040"?

Obviously, the major issue is that the payment gets properly credited to the proper year and SSN.

Personally I would recommend sending the payment in with a 2004Q4 1040ES coupon but would also put the SSN & "2007 1040" on memo line as fixer has recommended. But in fact it doesn't really matter, the purpose of any form is merely to make sure it gets properly applied.

The only reason I can image for the SSN is if the check and the associated paper gets separated. So that the IRS can do what with the check? Apply it to your account, without the associated paperwork how does the IRS know what period to apply a payment? Is the IRS going to contact you? The check normally has all that information preprinted. Okay, so what real purpose is the SSN on the check? Heck, all the people who can "see" the check noe has all your personal information including your SSN.

Looks like one way or another, the SSN is going to be there.

I leave the decision about SSN up to the client, but tell them that some clients prefer not to enter the number. I do tell them that if payment is misposted, I will charge them to straighten out the matter. RD1 is right in that usually name and address are on the check, but what if the second name on the return writes the check from his or her account. Guaranteed if IRS takes the time to locate this name, they will post it to that SS# and this will require contact with IRS.

"The only reason I can image for the SSN is if the check and the associated paper gets separated."

You answered your own question.

The check goes from the IRS to the bank. The bank has your social security already. Your fear can best be classified as a phobia.

The New Tax Guy

Yes, I answered my own question, because I wanted to show how stupid the idea was that the paper work and check would some how be re-associated.

But the comments about fear and phobia are way off the mark.

Nevertheless, if the IRS can so separate a check and its associated paper in time and or space to need the SSN on the check I am not sure about the security the IRS is maintaining , or the effectiveness of its processes.

It is now recommended that you never allow your social security to be place on a check. Why?

Because now you have in one place all of the necessary information for identity theft.

Wow. Irsfixer I did not know you would seek advise from me, however, the errors in the various IRS Pubs are so long that I will refrain from listing them, or , the fact that 60% to 70% of the notices the IRS issues have errors. No, I guess the IRS is perfect.

An Aside:

The job of the IRS is very, very difficult and I respect the people of the IRS for the job they do.

By the way my transmittal letters and instructional sheet all carry the wording that the IRS asks that such information be inscribed on the payment.

Perhaps the IRS should become more adept at processing their paperwork. Or maybe it will come down to using some other assigned account number rather than SSNs altogether.

If the cleaning crew is interested in stealing identities - you are screwed anyway.

The Post Office will have your tax return and/or payment voucher, so they have your SSN.

The IRS has your SSN.

Most banks do not returns checks anymore - but the bank has your SSN.

As far as banks returning checks, I recommend to all of my clients that at the very least they get copies of their checks from the bank. Many of them do still receive the cancelled checks. If we want to take this SSN issue a step further, there is also the bank statement that is returned with the cancelled checks or with copies of the cleared checks, one of which now has an SSN on it. Hmmm. I guess those people who steal mail from mailboxes now have social security numbers available to them where they would not have otherwise.

Anyone remember this: http://query.nytimes.com/gst/fullpage.html?res=9C00E4D91330F932A0575BC0A9679C8B63&sec=&spon=&pagewanted=all

Hard to fix the problem of incompetence!

Any day now I expect a client to ask me not to put their Social Security number on their return.

Not related to identifying the payment, I also suggest that if there is some leeway in when you make a payment that any "stray" income tax payments be made in time to reach IRS by the 15th of the month so that you can avoid the 1/2% late payment penalty that accrues on the 16th.

I do understand all the concern about identity theft and the wariness of putting soc security numbers on checks, but, the information is out there and it is not the honest people, or the usually honest but hurting for cash people that steal your identity. It is thieves that steal your identity. People who are in the business of doing this or someone who has made an effort.

There are better ways to prevent identity theft and one of those is to monitor your accounts on a regular basis. No what activity goes in and out of them. We have the ability to look at our accounts online in real time. Do that. Knowledge is power and protection. Subscribe to one of those credit check agencies that notify you anytime something happens to your credit.

I haven't had a personal checkbook in years. Haven't reconicled my personal bank account in years. Why, because I know what I write and I monitor my account and I know if something is wrong. Business accouont is different, those I reconcile.

Those are more realistic and worthwhile endeavors when discussing identity theft and how to prevent them.

When my clients ask about putting their soc security number on it, I give them the spiel i just posted. Protection is an ongoing battle.