Change of Date Ugly Letters

[Edsel]

As all of you know, the IRS changed the due dates of 1120-S, 1065 etc. for this past year.  Even our best efforts to inform our customers fell on deaf ears for the most part, and very few of them produced any substantive information which would allow us to file on time.

So now the IRS is sending out penalty notices.  These have resulted in several letters from many of us asking that the penalty be waived, as our clients were really blindsided.  [We were told in seminars last year this was going to happen, and we should be able to expect waivers of the penalty on a massive scale this year].

In spite of letters written to absolve the penalty, these letters are not being answered in the affirmative or negative.  I would imagine there are hundreds of thousands of such letters and if any IRS resources are assigned to deal with these letters, they are overwhelmed.

But guess who is NOT overwhelmed?  You guessed it!!  The collection division!!  They are sending out letters threatening levies even though the audit division has not made any final determinations.  And their usual position is "you should have dealt with this before it came to us - we can't do anything about this assessment."  That can be their position but the audit division is not doing their job.  They should issue a final determination to deny penalty relief before collection division is even notified.

How are the rest of you dealing with this mess??

 

 

 

 

[Abby Normal]

11 hours ago, Edsel said:

How are the rest of you dealing with this mess??

Um... we filed extensions, as normal, for all entities on 3/1. It was almost meaningless to us that the dates changed.

And the 1120S due date has been 3/15 forever. The due date for 1120 moved to 4/15 and the 1065, quite correctly, moved to 3/15 with a 6 month extension. I wholeheartedly approved of these changes.

[RitaB]

Well, I'm not experiencing this problem either.  Thankfully.  I did have three partnerships that I warned by e-mail in January about the new deadline, printed their acknowledgements of the new deadline and intentions to file on time, and then I got them extensions.  Got the returns done around April 1 as usual.  

I don't think clients filing late should count on penalty waivers.  I'd say pay up and hope for a refund.  

If I had not known about the new deadline, or if I knew about it and failed to get them an extension, yes, I'd pay the penalty.

[RitaB]

10 minutes ago, RitaB said:

If I had not known about the new deadline, or if I knew about it and failed to get them an extension, yes, I'd pay the penalty.

Then I'd fall on my sword and do my best begging for waivers.  Absolutely.

[Abby Normal]

Fortunately, partnership penalties are automatically removed with these magic words:

Partnership Late Filing Penalty Relief

Please remove the penalty for late filing of a partnership return under Rev. Proc. 84-35 and code section 6698(a). The partnership is a domestic partnership with 10 or fewer partners, each partner is a natural person or an estate, each partner’s share of each partnership item is the same as such partner’s share of every other item, the partnership has not elected to be subject to the consolidated audit procedures under IRC 6221 through IRC 6233, and all partners reported their share of all pass through items on timely filed individual returns.

[Abby Normal]

1 minute ago, RitaB said:

Then I'd fall on my sword and do my best begging for waivers.  Absolutely.

That's so meta to quote and reply to yourself.

[RitaB]

1 minute ago, Abby Normal said:

That's so meta to quote and reply to yourself.

So much to say.  So little time to edit. 

[Lion EA]

I do my best proofreading after I hit Submit

[Abby Normal]

14 minutes ago, Lion EA said:

I do my best proofreading after I hit Submit

So true. Somehow the errors just pop out in final form. Weird.

[BHoffman]

Like Abby, I file extensions for all business tax returns, ready or not.  I also filed for extensions on the 1099 forms.  Life is too short to work under the gun.  

1120S penalties might qualify for abatement under the First Time Abatement policy.  I've had these relieved over the phone more than once. Take Abby's advice about getting the 1065 penalty abatement and you might be able to deal with this over the phone by faxing the statement to the IRS rep.  

I used to avoid extensions. They have now become my best friend.  Knock on wood, none of my clients have received notices in the years since I've been filing extensions.  No hurry, no worry. 

[Catherine]

1 hour ago, Abby Normal said:

1 hour ago, Lion EA said:

I do my best proofreading after I hit Submit

So true. Somehow the errors just pop out in final form. Weird.

So it's NOT just me, then?  That's a relief!  

[FDNY]

16 minutes ago, Catherine said:

So it's NOT just me, then?  That's a relief!  

Whew!

[BLACK BART]

On ‎6‎/‎29‎/‎2017 at 10:46 PM, Edsel said:

As all of you know, the IRS changed he due dates of 1120-S, 1065 etc. for this past year.  Even our best efforts to inform our customers fell on deaf ears for the most part, and very few of them produced any substantive information which would allow us to file on time.

Since many deaf-eared clients will not timely file; we try contacting them but if unreachable I extend anyway.  I don't know if one-time IRS OPR director Karen Hawkins' opinion about not filing extensions without clients' permission ever became a 230 reg, but they don't enforce it anyway (as Patton once said about the army - "They have their agenda; I have mine"). IRS' is to impede business and take their money; mine is to facilitate it and prevent that.  

On ‎6‎/‎29‎/‎2017 at 10:46 PM, Edsel said:

...IRS is sending out penalty notices...resulted in several letters from... us asking...penalty be waived...letters are not being answered ...they are overwhelmed...guess who is NOT overwhelmed?...The collection division!!  They are sending...threatening levies...audit division has not made...determinations...their position is "...we can't do anything about this assessment."... the audit division is not doing their job...should issue a final determination...before collection division is even notified.

How are the rest of you dealing with this mess??

The only thing I see we can do is avoid it (file the extensions). Until not so long ago, you could write and expect reasonably quick replies from Audit before Collections got around to you.  No more!  My last two outing were disasters: (1) Took 5 months and many letters proving they cashed my check. (2) My error - filed 2014 payroll on a 2013 941 form; wrote many letters, they billed additional 2013 tax, wanted new 2013 W-2s, and listed 2014 as delinquent. Lucked out calling the Taxpayer Advocate and got a sharp agent who asked for POA and my letters.  I faxed, she fixed - 15 minutes.  Got a laugh when she read the IRS letters and confirmed my opinion of IRS, declaring "This is absurd!" (Call your state's TA - when they're good, they're very, very good). 

As to approval of extension changes, it depends on whose ox (clientele) is gored. I don't like it wholeheartedly, halfheartedly, or any other way because I have 1065s, but no 1120s; those with many corporate clients likely feel the opposite.  But I really don't like the new payroll deadline; it's all I can do to get the info by 1-31, much less correct wrong addresses or numbers employers don't have (yes, yes; I know they should have this, but as a practical matter some don't, and unless you can afford to emulate the "Soup Nazi" attitude, you have to suck it up).