If you received a CP161 notice from the IRS (balance due for underpayment of estimated tax), we have been made aware there are cases where they are being sent in error.
Below are the two types of involved cases that are affected:
- Trusts that elected to be treated as estates with tax years ending less than two years from the date of death, or
- Trusts that reported no tax liability on a prior year return and therefore were not required to make estimated payments.
The IRS provided a few updates and confirmed the following:
- A programming change in early 2025 caused the erroneous penalty assessments
- The business operating division and IT are currently working to correct the issue
- Impacted accounts will be automatically adjusted within approximately one month
Please send your relationship manager a copy of the notice you received so they can confirm if the notice was in error and monitor the situation.
The IRS is aware of this issue and there is no further action on your part at this time, unless further notices are issued.
If you have any questions regarding this, please don’t hesitate to reach out to your relationship manager at Froehling Anderson. We are here to help guide you!
