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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15432
Experience:  15years with H & R Block. Divisional leader, Instructor
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I own an S Corp. in MA which I started last year (2009). I

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I own an S Corp. in MA which I started last year (2009). I am the only employee of the company. I paid my payroll taxes quartly last year. In March 2010 I received a statement from the IRS saying that I was supposed to be paying monthly taxes because my income was above the $2500 limit. It also said they would waive the fee because it was my first time filing the 941. However, in April I received three request for payment statments from the IRS for late penalities. The penalitites totaled about $3000. I called IRS and explained my story, he was able to eliminate one of the penalities (now total is $2700). My question is, what is my best option for eliminating the penality (or at least reducing the amount owed)? I have the forms to appeal the amount but not sure what I should give as an explaination. Any help would be appreciated.


Hello and thank you for using Just Answer.

Payroll penalties do not apply if any failure to make a proper and timely deposit was due to reasonable cause and not to willful neglect.

The existence of any of the following factors may establish reasonable cause:

  • death, serious illness, or unavoidable absence
  • unable to obtain records
  • incorrect advice from the service
  • incorrect advice from a tax advisor
  • fire, casualty, natural disaster, or other disturbance
  • official disaster area
  • service error

State your reason (adding that your intent was not due to willful neglect and point out your good compliance history in the past and that you have complied with the proper time frame for payments) for the omission of payments and send a copy of the statement you have that says they are willing to abate the penalty.

If your abatement request is denied write a clarifying letter to the same address.


I sincerely XXXXX XXXXX information is helpful,



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