What This Letter Means
Letter 369C explains a change the IRS made to your penalty for underpaying estimated tax. That's the penalty figured on Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts. The IRS rechecked the penalty and changed it, either up or down. The letter says which way and why, and it usually includes a copy of the IRS's penalty computation.
Typical reasons:
- Increase: the payments you claimed didn't match the payments on your IRS account.
- Decrease: the IRS refigured the penalty using your prior year tax.
This letter goes to individuals, estates, and trusts. Corporations get Letter 1320C, which explains the Form 2220 penalty.
If the Penalty Went Down
You don't need to do anything. Check that the new amount shows correctly on your account.
If the Penalty Went Up
- Compare each payment on the IRS computation with your records: the dates and amounts of estimated payments, your withholding, and any overpayment applied from the prior year.
- If the IRS missed a payment, send proof, such as a bank statement or payment confirmation.
- If you believe you qualify for relief under the rules in Form 2210, complete and send Form 2210.
- If you lived or did business in a federally declared disaster area, the IRS may have postponed estimated tax due dates. Point that out in your response.
- If the increase is correct, pay it. Paying stops more interest from building.
Deadlines
Letter 369C doesn't carry a set statutory deadline. If it gives a response date, meet it. Keep the letter and the computation with your return for that year.
If you received Letter 369C and the penalty doesn't match your records, call us at (813) 229-7100.