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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 2822
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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What are penalties of not filing the Tax returns on time

Customer Question

What are penalties of not filing the Tax returns on time (Sept 15th ) for C and S corps. I have a C and 2 S corps to file taxes, but waiting on the closure of 2013 Audit before I file all the returns, that is what Tax investigator suggested to avoid getting
picked again for audit for 2014, so I want to delay the tax filings until my Audit is completely closed for 2013. What penalties we are looking at if I delay filing for C and S corps, none of these entities owe any money to IRS, all the estimated taxes were
paid before March 15th 2015.
Submitted: 1 year ago.
Category: Tax
Expert:  Barbara replied 1 year ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

As to the C corporation,

Late filing of return. A corporation that does not file its tax return by the due date, including extensions, may be penalized 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax. The minimum penalty for a return that is over 60 days late is the smaller of the tax due or $135. The penalty will not be imposed if the corporation can show that the failure to file on time was due to reasonable cause. If the corporation receives a notice about penalties after it files its return, send the IRS an explanation, and the IRS will determine if the corporation meets reasonable-cause criteria. Do not attach an explanation when the corporation's return is filed.

As to the S corporation,

The Federal late filing penalty for an S-corporation is $195 per month (or part of a month) per shareholder. In the event the corporation itself owes taxes (not common) there are additional penalties. If and when you receive the late penalty notice, send the IRS an explanation, and the IRS will determine if the corporation meets reasonable cause criteria.

In your case, the reasonable cause for both would be you were acting on the advice of the IRS agent.

Please let me know if you require further information or clarification.

Thank you and best regards,

Barb

Expert:  Barbara replied 1 year ago.

Just following up with you to see if you have any other questions. If so, please come back to me here at your convenience, and I will be happy to assist you.

If not, please take a moment to rate my answer since that is the ONLY WAY I RECEIVE CREDIT FOR ANSWERING YOU AND ALERTS JUST ANSWER TO COMPENSATE ME FOR PART OF THE MONEY THAT YOU HAVE ALREADY PAID.

Best regards,

Barb

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