Discussion:Penalties & Interest
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Discussion Forum Index --> Basic Tax Questions --> Penalties & Interest
Discussion Forum Index --> Tax Questions --> Penalties & Interest
| 14 September 2008 | |
| Client inadvertantly ommitted interest income from 2006 and received a CP2501 notice. The tax liability is 49,000. However there was an overpament of 129,000 that was carried forward to 2007. IRS says once this election is made it cannot be changed. The 2007 return has not been filed yet.
Is there anyway we can avoid interest and/or penalties under these circumstances? | |
| 14 September 2008 | |
| The 6662 penalty can be abated if the taxpayer demonstrates resonable cause for the understatement. I see no way to abate the interest charge in this instance. | |
ReadMyLips (talk|edits) said: | 14 September 2008 |
| I've never been successful at getting interest abated but usually no problem with the penalties if you can establish "reasonable cause".
However, I have had the IRS change the amount carried forward as a result of an error in the original return, they usually just send a notice. Also, I don't think that having an overpayment applied is considered an "election". I would get the IRS to give you the code cite for their position. | |
| 14 September 2008 | |
| The payment forward application is irrevocable. Usual rules concerning penalty will apply. | |
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