A State of New Jersey CBT Extension payment was not honored by the bank (the wrong account number was used for the extension). We remitted the full amount ($300K) of taxes due within 10 days following the due date. Is there a 10 day grace period allowed to remedy the rejection without incurring penalties and perjaps interest?
Country relating to Question: United States
State (if USA): New Jersey
Consulting with another CPA who indicated that there was a 10 day grace period.
I'm sorry to hear of your troubles.
There is no grace period. Taxes are due on the due date.
I'm certain the state would be accomodating if the error was on their part, but it sounds like the error was on your part.
If there was a grace period, I assure you, everyone who owed taxes would be using it.
That's not to stop you from writing a letter to request an abatement, but the state has no legislative authority that is required to accomodate your circunstances.
Over 20 Years experience
Hi from Just Answer. Saw something that might add to what the first Expert provided.While there does not appear to be a grace period, there is statutory authority for requesting, and the state granting, abatements for penalties and interest for reasonable cause. In the NJ Administrative Code, Title 18, Chapter 2, Subchapter 2, Penalties and interest, 18:2-2.7 Abatement of Penalties and Interest spells out how a taxpayer can show reasonable cause and how the Director can accept the request and abate these charges if there is a successful argument.http://www.state.nj.us/treasury/taxation/pdf/regs/penalties.pdf is the link to the text. While I did not citate the law section for your answer, it is a good starting point.Thanks from Just Answer. If you need anything more, please ask for the Expert of your choice.
The company paid $305,000 on 4/27 when the due date was 4/18. The final liability was $192,000. Yet the State has charged the full 25% penalty as the final tax return was mailed in Nov, 2011. I believe we have grounds to dispute a 25% penalty in that full payment was remitted shortly after the due date. What are your thoughts?
First problem is that the exte.sion itself was not accepted. That is what caused the big penalty. A late extension is the same as no extension. As stated earlier you. Can request an abatement but they are not under any requirement to accept your request.)
Reasonable Cause is described int he below document. The only circumstance that sounds like you might qualify for:
5. Any other cause for delinquency which would appear to a person of ordinary prudence and intelligence as a reasonable cause for delay and which clearly indicates an absence of willful neglect may be determined to be reasonable cause. Ignorance of the law, however, will not be considered as a basis for reasonable cause.
Hi again from Just Answer. Given your fact pattern, I think you certainly have an argument. There are several things that go into a reasonable cause abatement.The first is your track record with the taxing authorities. If this is your first late payment penalty issue, I think you have a better chance. I would make sure to mention a good taxpayer history of making payments and filing timely in your abatement request.Secondly, the payment was offered timely, but missed due to clerical error. The repair was done upon notice of the error. These are steps a reasonable person would have done upon notice.Third, are the times we are in. Tax revenues are important to governments now, maybe more than ever. Internal pressures to generate revenues from interest and penalties, which are a profit center for tax agencies, can influence how abatements are handled.I believe, assuming a profitable taxpayer with a good history and making a timely request, that your request could have a good chance of acceptance. I agree that the state has no burden to accept the request, but the fact that they accept such requests, and give guidelines for acceptance, leads me to be optimistic in your case.Thanks again from Just Answer.