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Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 2653
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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Danielle, I filed a W2/W3 on time (Jan 2013) 2012 tax year,

Customer Question

I filed a W2/W3 on time (Jan 2013) for the 2012 tax year, however, I failed to use a new EIN number I established 9 months prior. When I filed my 1040 with a schedule H, in April 2013 for the 2012 tax year, I used the new/correct EIN. This caused a discrepancy between the SSA and the IRS. The SSA has effectively cross referenced these two EIN's and I show a zero balance. The issue I have now is that IRS denied my request to waive the penalty which was assess for failure to submit W2 timely. The penalty ($2,528) is more than the Federal Income Tax withheld ($2058) for this household employee. I didn't file a W2c/W3c since I had explained all this to them in a letter. They have indicated that I was denied because I didn't show due diligence or establish reasonable cause. In filing an appeal, the IRS is looking for a statement outlining the law or other authority on which I rely. I guess my point is I filed on time, just with the wrong number, but everyone got their money. How can I show due diligence or establish reasonable cause to waive the penalty?
Submitted: 4 months ago.
Category: Tax
Expert:  Barbara replied 4 months ago.

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

Although not commonly known, the IRS created the first-time penalty abatement administrative waiver (FTA), which allows typically compliant individual and business taxpayers to request abatement, or removal, of certain penalties that the IRS has assessed against them for the first time. In effect, the IRS rewards typically compliant taxpayers with one-time penalty amnesty, which can save the taxpayer hundreds—sometimes thousands—of dollars.

My best advice would be to specifically request relief under the first-time penalty abatement administrative waiver, apologize for the error, and promise not to make the same error again. Also include a copy of the letter you previously sent to the IRS as well as any/all documentation. Mail the "new" letter and all enclosures by certified mail, return receipt requested, and of course, keep copies of everything for your records.

Please let me know if I can assist you further.

Thank you and best regards,


Expert:  Barbara replied 4 months ago.

Just following up with you to see if you have any other questions or concerns. If so, please let me know so I can further assist you.

Best regards,