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Discussion:Request for relief results in Penalty

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Discussion Forum Index --> Tax Questions --> Request for relief results in Penalty


Bottom Line (talk|edits) said:

23 March 2014
Client's 2011 1120S was filed in April 2012. No extension was filed. He is a single father whose son has Autism. I have prepared his returns since 2009. I was unable to contact him in Feb/Mar 2012 to get permission to file an extension for his 2011 return. (His son had special difficulties during this time period including a change in medication.) His S-corp has been in existence for over 10 years.

The S-corp was assessed a penalty for late filing his 2011 1120S. I wrote a letter to the IRS asking for a waiver of the penalty because of the son's challenge and stating that all prior returns had been timely filed. Received a letter back denying the request and saying that the 2008 return was never received by the IRS. NO CORRESPONDENCE HAS EVER BEEN RECEIVED REQUESTING THE 2008 RETURN!! Client gave me a photocopy of the 2008 return which was prepared and signed by a CPA. Client says he mailed the return but has no proof of mailing. Now the IRS is assessing a penalty for late filing the 2008 return AND the 2011 return! Any suggestions on how to get these penalties waived?

Ckenefick (talk|edits) said:

23 March 2014
was unable to contact him in Feb/Mar 2012 to get permission to file an extension for his 2011 return.

That's why Ck, and several others, say, "Look out for the client's best interests...and file the extension anyway."

Request a first time abatement. Try it over the phone. Do it for the year with the highest penalty.

And then we'll take it from there.

Bottom Line (talk|edits) said:

24 March 2014
I like the idea of extending as a routine and used to do it. But seems like lots of others recommend against it

EADave (talk|edits) said:

24 March 2014
Chris,

The first time abatement works, usually, but not when the taxpayer has filed late in the past. I ran into a similar problem with a client and the person at IRS denied the request because the client was late about 4 years prior to the tax year in question.

Although it wouldn't hurt to try to relief for 2008.

I file extensions for all my Corps too, although I missed one this year (egads!!) If I get sued for protecting the client's interests, so be it.

Ckenefick (talk|edits) said:

24 March 2014
I ran into a similar problem with a client and the person at IRS denied the request because the client was late about 4 years prior to the tax year in question.

Unsurprisingly, IRS didn't follow it's own IRM guidance, which involves a 3-year lookback.

Fsteincpa (talk|edits) said:

25 March 2014
When did the late filing penalty first begin? Was it around for the 2008 year?

Fsteincpa (talk|edits) said:

25 March 2014
Dang, penalties in 08 begin at $89 per

JR1 (talk|edits) said:

March 25, 2014
Wouldn't that new Rev Proc absolving S's from late filing be retroactive?

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