Why did an estate get an underpayment penalty notice?
A decedent's estate had tax due on Form 1041, but the tax year ended within two years of death. The IRS notice says estimated payments were underpaid. What should I check before paying?
Check whether the decedent-estate exception applies. Current Form 2210 instructions say no underpayment penalty applies to a decedent's estate for a tax year ending before the date that is two years after the decedent's death.
Your response file should include the notice, Form 1041, tax-year dates, date of death, account transcript, and a short explanation tying the facts to the exception. The IRS system may have generated a penalty because it saw tax due and no quarterly estimated payments; it may not have applied the fiduciary exception correctly.
Do not frame this first as a waiver request if the estate is exempt. Lead with the exception facts.
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