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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I seem to have been mailing my 1120S tax returns to the wrong

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I seem to have been mailing my 1120S tax returns to the wrong address. When I later requested copies, they had none.
So I resubmitted with "copy of previously filed return" the tax returns I thought I was missing.
I got two letters for 2008 & 2010 with "Failure to File" penalties and interest.
Then I got "Intent to Levy" Notices. $2000 & $7000 'ish
Yikes!
I wrote a letter requesting abatement of the penalties and interest because I felt I was providing copies of already filed returns.
My request was DENIED.
I need to appeal desperately! But I can't prove anything (can't provide a postmark) ... I will of course be using FEDEX for all future returns.
How do I write an appeal letter?
I must add that I am broke. Our business is barely hanging on as it is.

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

How are you today?

MyVirtualCPA :

I'm sorry to hear about your situation.

MyVirtualCPA :

When you write to request an appeal, what you do is lay out what you did in your initial request for abatement, then discuss that the abatement was denied and then submit your reasons that you are requesting an appeal of the decision.

Customer:

I was really hoping for some tips on how to write the appeal. Right now I only have what I originally wrote - that I initially filed the returns, most likely to the wrong address and I was sending them replacement copies to the correct address.

Customer:

Their reply that my information does not establish reasonable cause or show due diligence.

Customer:

How do I appeal that?

MyVirtualCPA :

When you filed your business tax return, did you owe tax?

MyVirtualCPA :

If you owed tax, and paid the tax with a check and that check cleared, that would prove that you mailed your return in.

MyVirtualCPA :

If you were due a refund, and never received a refund, that would unfortunately prove the IRS case that you did not follow through with your return because you should keep an eye out for any refunds, etc that you may have.

MyVirtualCPA :

Was there anything that happened during the time you sent in the returns that could have hindered your ability to file? For example, an illness or employee turnover?

Customer:

No, it was an 1120S

Customer:

There is no tax due.

MyVirtualCPA :

Did you timely file your personal tax return?

Customer:

I asked how they came up with the numbers.

Customer:

Yes (personal return)

MyVirtualCPA :

Did you include your S-Corp income on that tax return?

Customer:

I told them that all personal tax returns related to the 1120S were filed

Customer:

Yes - the K-1 info was on the Schedule D

MyVirtualCPA :

That's proof that you did your due diligence right there...

MyVirtualCPA :

Because the return had to have been prepared and filed for you to claim the amount on your personal tax return

Customer:

The 2010 penalty is $7020 and the 2008 penalty is $2136 - makes no sense why the more current return has a higher penalty

Customer:

Except two more shareholders in 2010

Customer:

But they all filed their returns.

MyVirtualCPA :

You sure you can't afford a few hundred dollars to have a professional assist you with the appeal? The reason I say this is because the IRS, in my experience, isn't as responsive to individuals working on their own as they are professionals.

MyVirtualCPA :

A few hundred dollars to save several thousand...

Customer:

I could afford about $200

Customer:

We are really broke.

MyVirtualCPA :

I don't know if that would work. Most professionals charge at least half that an hour

MyVirtualCPA :

But, someone may do that for $200 because all they have to do is write an appeals letter - if the appeal is denied then you are at the end of the road and have to pay the tax

Customer:

How do I find someone to write that for me for $200

MyVirtualCPA :

You would have to call around to your local professionals, tell them what you need and what you are able to pay

Customer:

What would you charge to write the letter?

MyVirtualCPA :

I can't solicit clients on this site, unfortunately - and we can't do actual prep work for people just provide information (rules the legal department set, not me)

Customer:

Okay, thank you.

MyVirtualCPA :

This time of year though, it's not really that busy if you came to my office I'd probably do it.

Customer:

Where is your office?

MyVirtualCPA :

LOL ... I can't tell you that (soliciting clients)

Customer:

Thanks

MyVirtualCPA :

But your focus in your letter is going to be that your personal returns were timely filed with the information from the 1120S

Customer:

Okay - I do appreciate that.. I think that is the due diligence I can prove.

Customer:

Should I include the copies of the tax returns for the officers?

MyVirtualCPA :

I would. Can't hurt

Customer:

Should I send the same letter for each year (2008 & 2010) separately?

MyVirtualCPA :

I would do each separately, because they are separate issues with the IRS

Customer:

Okay -

MyVirtualCPA :

The IRS will abate your penalties if you file your returns with the S Corp information, but in order to do that it has to be your first time. The problem here is that there are 2 tax years that did not get filed, in their eyes

Customer:

I know - maybe I should have attached the shareholders tax returns when I sent in "their copy"

MyVirtualCPA :

No, you should just send that with your letter requesting abatement or the appeal

Customer:

How many people send the returns to the wrong address -- and I guess the IRS trashes them?

Customer:

Okay

MyVirtualCPA :

Theoretically what should happen is that they IRS should route the return to the correct location

MyVirtualCPA :

But they handle millions upon millions of forms a year, so it's easy to get lost from one place to another

Customer:

Thank you so much. Have a great day!

MyVirtualCPA :

You too. IF you would, please rate my response as "excellent" so that I may receive credit for assisting you today

Megan C and 2 other Tax Specialists are ready to help you
Thanks for your positive rating. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. IT was a pleasure working with you today.

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