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Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2495
Experience:  Nearly 30 years of varied tax industry exp. Tax Biz owner
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If I failed to file tax returns for a tax year for an S corporation

Resolved Question:

If I failed to file tax returns for a tax year for an S corporation that did not have nay activity (income or expense) and was not notified until 2 years after the fact, do I have any recourse in terms of negotiating the penatly amount?
Submitted: 2 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 2 years ago.

Hello, welcome, and thank you for choosing Just Answer.

 

Even though a corporation does not have activity (income or expenses), until you officially dissolve a corporation, you are still required to file a tax return. Lack of knowledge is not an acceptable excuse with the IRS.

Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2495
Experience: Nearly 30 years of varied tax industry exp. Tax Biz owner
Tax.appeal.168 and 5 other Tax Specialists are ready to help you
Customer: replied 2 years ago.
SInce I was not notified until 2 years after the fiscal year, is there room for negotiation? If I would have been notified by the IRS that the reurn was late I would have filed and instead of two fiascal years of penalties I would have only 1?
Expert:  Tax.appeal.168 replied 2 years ago.

It is typical for the IRS to contact a taxpayer 2-3 years later. That just seems to be the way they operate. If you can show reasonable cause for not filing, you may be able to negotiate or have the fees/penalties waived, (that would not include simply not knowing). Unfortunately, if you cannot show reasonable cause, more than likely, you will not be able to negotiate the fees/penalties.

Expert:  Jax Tax replied 2 years ago.
You can request the abatement of penalties using form 843 but the balance does not matter at all. Throw the letter away. Once a corporation is closed, the IRS cannot collect penalties. There are only a few taxes they can asset against the owners and this is not one. The only option is to collect it against the corporation which as you state is closed. You don't need to do anything.

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