Will the Government or a Credit Card Issuer Give Me a Break?

Mistakes happen. Just hope they don’t involve your credit card issuer. Almost any business or agency, including the IRS, is more forgiving.

That’s good for Anatoliy Aronsky, who forgot to include his W-2 forms when he filed his 2007 federal tax return. But it’s not so good for Marie Deerfield, who overlooked at $3 balance on a credit card account.

Aronsky was worried he’d have to pay a penalty because he forgot to attach the W-2 forms. However, IRS spokesperson Kevin McKeon said that’s unlikely. Usually, the IRS will just send a letter, requesting the missing forms. “Generally, you will not be issued a penalty but processing of your return will be delayed,” McKeon said.

Don’t send the missing forms until the IRS asks for them. The letter will include instructions on where to send them. If you send them before you get a letter, the forms are just likely to get lost at the IRS processing center.

Deerfield paid off a credit card last October. At least she thought she did.

The New York City woman manages her credit card online and doesn’t receive monthly statements in the mail. Since she assumed the account was paid in full, she stopped reviewing her electronic statements.

As a result, she overlooked a $3 balance. The charge represented residual interest, or interest that accrued on the account from the date her October statement printed and the date the card issuer received her payment for the balance due.

Deerfield discovered the outstanding balance when she checked her credit report. The account was listed as more than 90 days past due, and triggered a 100 point drop in her credit score. “Help,” she said. “I’ve never paid a credit card late before.”

The card issuer considered her strong payment history, and removed the delinquency from her credit report. However, consumers with histories of even one late payment wouldn’t be as lucky, and could face significant declines in their credit scores for failing to pay as little as a few dollars on an account.

Bookmark: