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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10114
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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We recently filed our 2009,2010.2011 1120-s returns and we

Customer Question

we recently filed our 2009,2010.2011 1120-s returns and we did not owe any money however we just received a CP162.hOW CAN i AVOID PAYING These penalties?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Hi,

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If you've filed everything now, you may be able to qualify for what's called "First Time Abatement." for the penalty for 2009 if you have previously filed all returns and owned nothing (FTA), and POSSIBLY Abatement for Reasonable cause on the others.

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The fact that you did not owe will help, BUT (I don't want to give you false hope here either. That would be irresponsible) if there is truly a reasonable cause - then (although this one is less likely) you may be able to get 10 and 11 abated under THAT relief.

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"Reasonable Cause" Requires Extraordinary Circumstances," an article from the Journal of Accountancy, sheds some light on this:

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"

If the client is delinquent in filing multiple tax returns, it will certainly be more difficult to meet the standard of reasonable cause. Moreover, general medical problems, not feeling good, stress or being overworked will likely be insufficient causes to meet the standard of reasonable cause. However, the facts and circumstances of each case will dictate whether a request for abatement of penalties should be submitted. In cases involving one or only a few years of delinquent returns, the authors have been successful in having penalties abated for such diverse reasonable causes as adult attention-deficit disorder, depression following the death of a spouse, alcoholism and, even in one instance, divorce.

A request for abatement of penalties should include a well-written letter detailing the reasonable cause and documentation supporting the underlying facts: letters from doctors, medical records, death certificates, insurance records or a police report if the medical excuse resulted from the taxpayer’s being a victim of a crime. The abatement request should also clearly show how the medical problems directly led to the taxpayer’s inability to pay the tax or file the return when due."

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Hope this helps

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Let me know if you have questions

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Lane

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I hope you'll rate me positively, using the stars on your screen … (that's the only way we get credit for the work here) … based on thoroughness and accuracy, rather than any good news/bad news content ... Hopefully, having all the facts will help you "see around some corners."