Johnson Price Sprinkle PA (JPS) a leading accounting firm in Western North Carolina announces that in the past week, a significant number of taxpayers received letters from the NC Department of Revenue indicating that extensions they filed in April 2016 were denied. The letters were sent to individuals, partnerships and trusts, indicating that the extension had not been timely filed. However, in most instances taxpayers or their CPAs had certified receipts to prove that the extensions had in fact been timely filed. In addition, the letter requests that the tax return be filed within 30 days.
Discussions with the Department indicate that these letters were caused by an issue with delivery of mail by the US Postal Service. The USPS contacted the Department earlier this month (May) and indicated they had had identified several trays of certified mail addressed to the Department that had not yet been delivered to them. Once received, the Department began processing the mail, not immediately realizing that many of the extensions had in fact been postmarked much earlier. As a result, some of the extensions included in this batch of certified mail were input into the Department’s system as having been filed late, triggering the denial letters.
The Department has already started correcting these errors in their system. We have also suggested to the Department that they mail letters to affected taxpayers to acknowledge the error and confirm that their tax record has been corrected. Doing so would save CPAs and taxpayers significant time drafting individual responses.
If you have received a letter from the Department indicating that an extension was not timely filed, but you have proof that in fact it was timely filed, you may wish to wait a week or two to see if a revised letter comes from the Department. However, if such a communication from the Department has not been received by the time the 30-day window is set to expire, it is advisable to provide proof of timely filing to the Department.
Asheville Boone Marion
828-254-2374 828-262-0997 828-652-7044
Johnson Price Sprinkle PA (JPS) is a leading certified public accounting firm in Western North Carolina, providing innovative solutions created specifically for small to mid-sized businesses. With a sixty year history, JPS has built its practice on providing superior accounting and exceptional service, in taxation, business advisory and assurance, to move clients forward by giving them the power of a national firm with the attention of a community-based one.