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Jon Andrews
Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 3118
Experience:  I deal with all levels of tax planning and controversy - from the ordinary to the complex.
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what do I need to do to try to get penalities reduced on 941

Resolved Question:

what do I need to do to try to get penalities reduced on 941 taxes? is it possible?
Submitted: 4 years ago.
Category: Tax
Expert:  RD replied 4 years ago.
What is the penalty due to? Is it late payment of taxes? or late filing?
Is there a reasonable cause for the delay?
Customer: replied 4 years ago.
both- to make a long story short we had 4 clients not pay us for work done. went to court with minmal sucess one still under appeal. as you know economy has not helped at all, which is the main reason clients did not pay work was completed as speced. I own a small general contracting llc (my wife and i) I am thinking about closing the business to get a longer term in paying off the penalities. I have not been working since Febuary of 09. I requested a reduction but was turned down would appeal even work?
Expert:  Jon Andrews replied 4 years ago.

Can you provide some details such as - how many quarters, which quarters, what is the total dollar amount (approx) of tax invlolved by quarter, what is the approx total dollar amount of penalties, how much do you still owe, etc.

 

The more information provided, the more likely we can construct a response that might help.

 

jon

Customer: replied 4 years ago.
The penalities are from tax period of 4th qt 2007 and 4th qt 2008 we still owe about 4000 on 1st qt 2009 up to date since then(no employees) totals penalitess in last 2 years about $7000 total amount owed irs is $7,000
Expert:  Jon Andrews replied 4 years ago.

Bearing in mind that the IRS is not required to reduce or remove penalties - your best bet is to write a detailed letter emphasizing that 1. you have corrected the situation that was leading to the penalties, 2. you are current with respect to all tax filings and tax payments since Q1 2009, 3. the payment of additional penalties presents a financial hardship for the business, and 4. request abatement based on the above.

 

You should keep the letter on point to the circumstances and request - you are trying to convince the IRS that enforcing collection of the additional penalty amount would not serve any purpose as a deterrent because you have already addressed the situation and are taking the steps necessary to ensure that it does not happen again AND that enforcing collection will harm the ability of the business to continue to operate profitably. In this regard, the circumstances that led to the original delinquency usually should not be discussed - they have heard all the reasons before.

 

jon

Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 3118
Experience: I deal with all levels of tax planning and controversy - from the ordinary to the complex.
Jon Andrews and other Tax Specialists are ready to help you

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