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Doesn't the IRS software automatically calculate the withholding penalty?

No. If you owe an underpayment penalty, you fill out Form 2210. If you are asking for a waiver, you may or may not be required to figure out the penalty, depending on the type of waiver you are asking for.

That said, since the instructions for Form 2210 were most recently updated on 3/26/19, presumably to adjust for the updated 80% exception (as opposed to the 85% exception announced in January, or the 90% exception that was in place for prior tax years), anyone who filed prior to 3/26 (or even after, depending on how soon tax prep programs were updated) may have had the penalty assessed incorrectly.

Given that many of the commercial tax prep software programs market that they are accurate, one would hope that they would reach out to their customers who were incorrectly assessed a penalty.

AJ
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