- What it means
- You did not pay enough estimated tax during the year, or paid it late, and the underpayment penalty was assessed.
- Respond within
- 21 days from the date on the notice
- What to send
- Payment, or Form 2210 if an exception applies.
- Write it
- Missed deadline explanation
- When to get help
- Rarely. If income was very uneven, the annualized method on Form 2210 may reduce the penalty and is worth a preparer's time.
What the letter says
The penalty is interest on each quarterly installment you underpaid, from its due date until paid or until April 15. It is computed at the federal underpayment rate.
Ways to reduce it
The annualized income installment method on Form 2210 if your income came late in the year. A waiver if you retired or became disabled during the year or a casualty occurred. Withholding late in the year counts as paid evenly, which sometimes reduces it after the fact.
First-time abatement
Does not apply to this penalty.
What to gather
- The notice
- Your return with Form 2210 if filed
- Estimated payment records with dates
- Income by quarter if you will use the annualized method
Write back
The Missed deadline explanation tool builds the response in the order the IRS reads it. Fill it in, review it, print it, and send it with copies of the documents above and the notice stub on top.
Before you send anything
This is general information, not tax advice. Situations differ. Check with your tax advisor before you send anything. Nothing on this page creates a client relationship.