Discussion:Reasonable Cause - good excuses

So I will go first:

For a late 2553:

"I thought the attorney did it. They told me it was an S corp and they filled out the corporate minutes that we selected S."

"I told the accountant to do it in February. I guess he was busy and forgot."

I was in the hospital in a coma for 2 months from novemeber to 12/31/xx and missed the rmd distribution.

This saved my client 20k in rmd 50% penalty.

Clerk was told to file the forms. She put them in the filing cabinet.

2. Medical/health reasons 3. Failure of third parties who had no interest in the matter (delay in receipt of K-1 forms especially) 4. Incarceration 5. Change of accountants 6. Spotless record in the past

All these reasons must have a basis in fact.

IRS had not approved the Form 1023 application in time, so the organization did not know whether it WAS tax exempt by the filing date. We couldn't file an extension, for the same reason - we did not know on that date - which extension form to file.

I also threw in "Because of this incident, the organization has made changes to their internal procedures to ensure that this deadline will not be missed in the future. This organization is working to serve many needy families, and the assessment of this penalty will place a substantial strain upon the continuation of their programs."

I was in prison when the return was due and subject to Federal prosecution I could not comply with additional Federal reporting requirements.

And you expect me to know this? I am sorry it is late, but I had no idea what I was doing!!

The best I heard.....

I quit smoking...crs is a medical condition and I had diminished capacity due to my inability to smoke (you can substitute any vice in the quotation). It is a medically proven fact that an addiction causes severe depression and the inability to form decisions. :)

I was just at a CPE and the speaker said that when he sends letters trying to abate for late 2553's, etc., he uses the phrase "Because of reasonable cause, Form XXXX has been filed late..."

He has never been questioned on it.

For nonprofits (990s, 1023s, etc.): We didn't know we were required to do that, but now we've hired a _____ to keep us in line.

Or for payroll: that one is getting harder to waive, I think. But I have seen reference made to hiring a new payroll service where there was none before.

I was taught this by a former IRS man many years ago, and have adhered to this in most cases. Maybe TxSrv will give us some insight.

"All K-1's were given to the partners and all K-1 items were properly reported on the partner's 1040's by the due date of the return. Partner's mailed the 1040's but forgot to mail the 1065."

I just had to do one of those, sometimes people take the returns home and they only look at what they have to pay or get back (on the 1040) and forget all about the 1065.

"Inadvertently omitted from prior years tax return".

Never had them come back with penalties...

http://aicpa.org/download/cpaltr/2004_02/supps/F-SmlFeb.pdf

"Client died on 01.02.200x. Records not found until mid March. All reports and taxes promtly paid and filed. Will not happen again." (I just had to add that part).