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On our S corp, we are filing several years late returns.

On our S corp...

On our S corp, we are filing several years late returns. Just received a penalty invoice from IRS for one of the years for failure to file. There were no taxes owing. I'd like to know how they calculated this penalty and whether anything can be done to modify or remove penalty.

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

The specifics are calendar tax year 2015, and we filed an extension. The penalty being charged is $4680.

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Answered in 4 minutes by:
3/27/2018
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,387
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

S corporations are required to file a tax return, but do not pay taxes.

The IRS charges each shareholder a late-filing penalty in the amount of $195 for each month, or part of the month, that the return is late for up to 12 months.

Once you have filed your delinquent tax returns, you can request an abatement of the penalty. You can use the First Time Penalty Abatement Waiver for the first year and reasonable cause for subsequent years.

Please let me know if I can assist you further.

Thank you and best regards,

Barb

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Customer reply replied 3 months ago
Thank you. And in this case, the return is appx 28 months late. What happens after the 12 months you stated?

The $195 per shareholder per month penalty is for up to 12 months for each tax year that is late.

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Customer reply replied 3 months ago
the penalty doesn't keep accruing after 12 months then?

No.

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Customer reply replied 3 months ago
Okay thank you for your help.

But each tax year accrues separately for 12 months.

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My pleasure.

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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,387
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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