Payment, bill and adjustment financial transactions are assigned
an effective date. This is the date that the debit or credit amount
affects the obligation's balance and is important for penalty and
interest calculations. The following are some examples of how the
effective date is set:
- An assessment's effective date is typically the due date of the
assessment. This is the date at which this amount impacts the obligation's
balance with respect to penalty and interest calculations. If the
taxpayer files a form earlier than the due date of the form. The form's
due date is still used for the assessment's effective date because
if the taxpayer does not pay, penalty and interest should only start
from the due date, not the date the form was posted. The same is true
for forms that are filed after the due date. The penalty and interest
should calculate from the due date, therefore the assessment's effective
date should be set to the due date.
- Penalty and interest transactions are assigned an appropriate
effective date based on period of time that the penalty or interest
charge covers. For charges that accrue after the period passes (such
as interest charges), the effective date should be set to the end
date of the covered period. For charges that accrue ahead of the period
(such as charges that are "per month or any part thereof"), the effective
date should be set to the start date of the covered period.
- A payment's effective date is typically the date the payment was
considered received.
The system requires an effective date by default. However, it
is possible to use a feature configuration setting to allow effective
date to be optional for new debit adjustments. In this case the FT's
"new charge" switch must be checked. This functionality assumes that
a separate process is able to determine the proper effective date
based on other information and can update the financial transaction
at that time to populate the effective date properly. For example,
if there is a miscellaneous charge that should only be considered
effective after the taxpayer is informed of the charge, the adjustment
can be created as a "new charge" with no effective date. The process
that produces the correspondence to the taxpayer to inform them of
the charge is responsible for updating the FT to set the effective
date (and reset the "new charge" switch).
CAUTION:
The
base product's penalty and interest calculation logic will ignore
any financial transactions that do not reference an effective date.
It means that the amount will not factor into any calculation basis
amount.
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