The Internal Revenue Service has issued announcement 2001-112, Redesignation of Estimated Tax Payments, which provides relief to corporations that pay estimated income tax payments.
It has come to the attention of the IRS that many corporations will report income substantially less than previously expected because of economic disruptions resulting from the September 11, 2001 terrorist attacks. Some corporations may have already made estimated payments for taxes that will exceed their projected annual income tax liability.
To alleviate the situation of an overpayment of estimated income taxes, the IRS has agreed to allow corporations faced with this overpayment situation to redirect previously paid estimated income tax payments to satisfy obligations of employment taxes and withheld income taxes.
Corporations wishing to redesignate previously-paid estimated income taxes should contact the IRS at its Disaster Relief toll-free telephone number, 1-866-562-5227.
Taxpayers are reminded that any shortfall in estimated taxes due to such a redesignation may result in penalties and interest for underpayment should the corporation fail to meet its estimated income tax obligation by the appropriate due dates.