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What to Do After a State Tax Return is Rejected

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  • 12-29-2018, 12:04 AM
    bloodbath
    What to Do After a State Tax Return is Rejected
    My question involves tax law for the state of: North Carolina

    So, after some very complicated stuff in a previous year due to moving abroad, foreign income exclusion, multiple state returns, and the like, I ended up having to file my 2015 NC individual income tax return (and Federal and State returns) quite late in 2016 (in October) with an extension. I filed and paid the balance due on the return (plus the penalties) prior to the extension deadline. However, it turns out that, several months later (in February 2017), the return was rejected as unable to be processed due to a printing error (seriously?); thus, the paperwork was sent back to me. I didn't hear about this from my family in NC, where my permanent address is, and I didn't discover this until... today. There was a letter enclosed saying to reprint the return and mail it to them to guarantee the original filing date in October 2016, but there was no deadline on the form for the resubmission.

    As of now, the full balance plus the penalties were paid on the mailing of the return (and the check was cashed by the DOR, which is why I thought there wasn't a problem), but apparently the return still remains unfiled. Thus, two questions:
    1.) Should I still re-file the return and, if so, should I file it as an amendment?
    2.) Were the rejected return to be re-filed, would that expose me to any penalties? (Since the balance has been paid in full, my research suggests there aren't any possible penalties resulting, but... well, since I don't live in the US and the flow of information from one side of the pond to the other can be a bit lacking, it's not something I want to screw up.)
  • 12-29-2018, 03:56 AM
    llworking
    Re: Rejected North Carolina Return Issue (from 2015)
    You refile the original return. Since they never accepted the original return, there would be nothing to amend. I cannot say for sure for NC, but in all of the states that I am familiar with the fact that you have already paid the tax, and included any penalties due at the time, would indicate that no further penalties would be imposed.
  • 12-29-2018, 08:07 AM
    flyingron
    Re: Rejected North Carolina Return Issue (from 2015)
    I agree with LL, but there may still be interest due if you paid in October. The tax payment was due in April, the extension only allows you to file late, you were expected to estimate and pay the tax by April.
  • 12-29-2018, 08:37 AM
    llworking
    Re: Rejected North Carolina Return Issue (from 2015)
    Quote:

    Quoting flyingron
    View Post
    I agree with LL, but there may still be interest due if you paid in October. The tax payment was due in April, the extension only allows you to file late, you were expected to estimate and pay the tax by April.

    True, but he/she did say that they calculated the penalties and included them with the payment that they made by the extension deadline. I took that to mean penalties AND interest, but if they neglected to include the interest, then you are correct, there could still be a minimal balance due.
  • 12-29-2018, 10:20 AM
    bloodbath
    Re: Rejected North Carolina Return Issue (from 2015)
    I did pay both the penalties (failure to pay) and interest along with the balance due when I filed the return in October. I probably should, indeed, have paid with the extension request in August. (Lesson learned.)
  • 12-29-2018, 11:24 AM
    flyingron
    Re: Rejected North Carolina Return Issue (from 2015)
    If you computed them correctly, it shouldn't have been a problem, but the interest runs from APRIL not from August or October.
  • 12-29-2018, 01:30 PM
    bloodbath
    Re: Rejected North Carolina Return Issue (from 2015)
    Quote:

    Quoting flyingron
    View Post
    If you computed them correctly, it shouldn't have been a problem, but the interest runs from APRIL not from August or October.

    Knew that and did calculate the interest (at 5% p.a.) from the April date.
  • 12-30-2018, 07:19 AM
    budwad
    Re: Rejected North Carolina Return Issue (from 2015)
    Since the return was filled within the extension, the penalties and interest was included, and the check was cashed, shouldn't the resubmitted return be amended to reflect that no money is due?
  • 12-30-2018, 12:40 PM
    llworking
    Re: Rejected North Carolina Return Issue (from 2015)
    Quote:

    Quoting budwad
    View Post
    Since the return was filled within the extension, the penalties and interest was included, and the check was cashed, shouldn't the resubmitted return be amended to reflect that no money is due?

    No. They never received an original return. They need to receive the original return, not an amended return. The department knows that there is a credit on the account. That is why they are contacting the OP and asking them to file the return. They have money and no return to go with the money.
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