Hundreds of North Carolina taxpayers are fretting over letters they received in error stating they missed the annual Tax Day deadline to file requests for extensions on their taxes.
Rollin Groseclose, a certified public accountant at Johnson Price Sprinkle PA in Asheville, said he mailed paperwork for an extension on his own taxes on the April 18 filing deadline. A letter Groseclose received May 18, though, gave him 30 days to submit his return along with payment of the applicable tax, penalties and interest.
By then he had already heard that similar letters were going out to some of his clients.
The N.C. Department of Revenue sent out an estimated 7,600 letters in May denying extension requests on the basis of missing the April 18 deadline. The department now estimates a bit more than a third of those letters were sent erroneously.
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Trevor Johnson, a spokesman for the Revenue Department, said the issue stemmed from a delay in receiving 25 trays of mail from the U.S. Postal Service. The mail arrived well after April 18, he said.
A Postal Service spokesman said the agency is looking into the matter.
The deadline to file taxes or requests for extensions was April 18 this year instead of the usual April 15. Those who submitted paperwork closer to the deadline appear to have been at the greatest risk, Groseclose said.
“I’m honestly still sitting on this letter hoping to hear from the Department of Revenue saying yours was one of the ones that we messed up on,” Groseclose said.
Groseclose is involved with the N.C. Association of Certified Public Accountants. When he discovered the problem was widespread, he worked with the group to try to solve it.
The association’s CEO, Sharon Bryson, reported receiving about 30 notifications from CPAs concerned that their clients had received incorrect letters similar to those that went to Groseclose and his clients.
“We helped the Revenue Department see the problem, and they are in the process of identifying all the taxpayers who erroneously received those denials,” Bryson said. “Hopefully by the end of this week, said taxpayer will have a letter saying, ‘Oops, we’re sorry, and you’re extension is permitted.’”
Johnson confirmed the Department of Revenue has talked with members of the state’s CPA association and is working to resolve lingering extension issues.
“If (taxpayers) received a letter but their extension request was filed timely, they will be receiving another letter from the department saying that the first letter was sent in error,” Johnson said. “There will be no action required on their part because we will make the adjustments that are necessary in our system.”
Some taxpayers who don’t receive a follow-up letter but believe the original letter was a mistake may find that hard to prove.
While the vast majority of taxpayers work with a CPA or tax adviser to file extension requests, some choose to file independently or personally go to a post office. People who did not keep certified receipts may find themselves out of luck in getting their extensions approved, according to Groseclose.
Groseclose advises taxpayers and CPAs without certified receipts to file within the 30 days required in the original letters.
Taxpayers who submitted their extension requests electronically aren’t known to have reported problems, according to the Department of Revenue, CPA association and multiple tax service providers.