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Pay tax, pay interest, do not pay penalty. Call with client or wait for POA. Put "penalty abatement, civil penalty" on the line below the 1040 on the POA. Include at least a year before the trouble started and one year after (2019-2024).

My girls gave my husband a gag gift of a USB pet rock some years ago, for his office. He recently found it with a bunch of things he brought home when he retired, and it's time to re-gift the rock. If anyone here wants it, they can have it for postage (it will fit in a small usps priority mail box). They still sell them brand-new, for double or triple the postage price. We have the original box and instruction manual. Apparently, the people most confused by it were upper level managers and IT.

"Timothy J Lundquist of Minnesota pleaded guilty to willfully failing to account for and pay over employment taxes for his automobile transmission business. Lundquist was responsible for filing quarterly employment tax returns, as well as collecting and paying over to the IRS payroll taxes withheld from employees’ wages. For at least the last quarter of 2013 through 2018, Lundquist did not pay withholdings to the IRS or file required employment tax returns. In total, he caused a tax loss to the IRS of more than $1.2 million. IRS Criminal Investigation is investigating the case. Lundquist faces a statutory maximum of five years in prison. He also faces a period of supervised release, restitution and monetary penalties." I am astounded that he got away with this for 5 years!

I would get a POA now. The IRS will need it in order to talk to you. I'm sorry for your client and you.

Top of the class .

That was the rule 20+ years ago. It was repealed and struck from section 453. In order for shareholder to receive installment treatment, the corp must adopt a plan of complete liquidation. The sale of the assets and distribution of the installment agreement to the shareholder (in exchange for his/her stock) must occur within 12 months from the date the plan of liquidation is adopted. See sec 453 for details.

Take this with a grain of salt since I don't deal with these kind of clients: When you have the returns prepared, pay the tax and interest ( not the penalty) via direct debit or Direct Pay. Then file the penalty abatement request. Remember the POA will take 5 to 7 weeks to be processed. Don't know if it would be possible with this client, but in the past I have dealt with the POA processing delay by making phone calls together with my client in my office.

Any depreciation gets recaptured and taxed in year 1 so that could be a problem when the resulting tax is greater than the first year proceeds. Don't think it makes any difference whether the corporation is accrual or cash The corporation can terminate and distribute the installment sales contract to the stockholders. This is a test of my memory. Did I pass or fail

This website maintained by an ex IRS employee should answer your questions: https://www.irsmind.com/irs-penalties-and-penalty-relief/