Discussion:How to reduce late filing and late payment penalties
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Discussion Forum Index --> Tax Questions --> How to reduce late filing and late payment penalties
| 6 April 2006 | |
| I have several clients who have negelected to file their tax returns for the past several years. One back to 2000. The late filing fees, late payment fees are substantial. I'm planning on submitting the returns without tax payments due and without calculations of fess and interest and let the IRS figure them. These tax payers have no resonable explanations for not filing. Any suggestions on best way to handle the filings and reduce the penalties? | |
| 6 April 2006 | |
| I have the same issue with a client who has received notices of delinquency for prior years returns not filed. I am filing the prior years returns, not submitting payment and let IRS get back with us about the tax, penalties and interest.
I then am going to request an abatement of some of the penalties and interest due to "stupidity" of the client...jk; I will request the abatement citing the client moved, etc. etc. It may not do a stinking bit of good, but I shall try :) | |
Controller (talk|edits) said: | 7 April 2006 |
| Ditto on DZCPA. I had a client who hadn't filed in two years. He paid for the first filing, but for the second filing I had to really push to get paid. I think a professional in our office knew him and that was the real reason he finally coughed up the payment. | |
| 7 April 2006 | |
| And I thought that I had the only 'cream of the crop' .... client hadn't filed in 8 years!! I have been doing his ex's for the past 14...anyway, came clean when the IRS got onto his scheme....Even though it was over the 3 years, IRS still wanted documentation.....the real kicker......this guy was to receive anywhere from $3,000 to $5,000 back each year from the IRS. Of course, only qualified for the past 3 years!!! Then, to make matters worse.......HE NEVER CAME BACK TO PICK UP THE WORK I HAD DONE..........When I complained to the ex for sending him to me, she paid!!! Unfortunate for her, a little embarrassing for me, but, hey, money is money and I WORKED hard for this!! | |
| 7 April 2006 | |
| I don't take clients that haven't filed in years. No matter what they say about reforming they will be in exactly the same situation in a couple of years. If you can do the work when you are slow and you get the fees paid up front, I suppose it might make sense to do their work. But from my viewpoint it just isn't worth it. | |
| 7 April 2006 | |
| I agree with fees up front. I have this client's files sitting in a chair in my office and there it will sit until I get a check. I am not charging the total fees up front but I am charging 75% so I know I have made something... | |
| 7 April 2006 | |
| That 75% sounds like a great idea! People just never cease to amaze me...... | |
| 29 May 2006 | |
| Likewise, just landed a client that hasn't filed for 17 years. She needs to buy a house now, and thinks that filing for just the last two years (to satisfy the bank letter for stated income) will be OK. I'm not OK, and need to request an engagement letter, retainer, and convince her to file all the returns where appropriate. Any takers and input is appreciated..... | |
| 30 May 2006 | |
| Gmikeg - The bank will probably also request a letter from you with some specific language that the bank will suggest. I would be very careful (or should I say very, very, very careful) before I signed any letter for this client. | |
| 31 May 2006 | |
| Warren, if you don't mind me asking, you don't take clients that haven't filed in years because you're concerned they'll do the same in the future? With all due respect, why is that your concern? Get paid in full up front but beyond that, I don't understand. I'm also unclear on why you believe the bank will request a letter. Could you please explain?
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| 1 June 2006 | |
| Good question!!
I think the answer could be: One: "Because if this people don't want to pay taxes at all , it would be hard to get my fees collected from the morons- Skasselea gave the answer: "Collect the fees on front. Second reason: They ask questions like that: "May I get deductions for a friend of mine living in Babilonia ? Also- This kind of clients most of the time are complaining- You want to prepare his taxes . You dont want to listen complains against the IRS...neither the US Govertment | |
Michaelstar (talk|edits) said: | 1 June 2006 |
| Unfortunately, when filing late returns for clients that have no resonable explanations there is really not much you can do based on my experience. Basically - you have no "reasonable cause" to request abatement of the penalties. Even if you had reasonable cause and was able to have the penalties abated - you will not be able to have the interest reduced. The IRS does not have a statue that allows interest to be just forgiven - unless your filing an OIC (I am not sure with the OIC) or bankruptcy.
On behalf of Warren - I would bet he has a very successful practice and does not want the problems that flaky clients bring unless they are very rich and want to write him checks up front (that clear) for lots and lots of money - can not say I blame him. | |
| 2 June 2006 | |
| Update - Turns out my client has kids and is getting money back for 2003 and 2004, and it will pay 99% of her 2005 liability!....You never know...
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