IRS Civil Penalty

[ILLMAS]

Client received a hefty penalty for payroll/1099 related forms for 2019, I called the IRS and the agent mentioned that she does not see specifically on what is being charged.  She mentioned it could be when 941’s don’t match W2’s etc…, but we are not convinced since everything was filed and we are thinking the problem might be coming from the 1099s.  Back in 2021 one of their independent contractors was not getting credit for federal withholding on a 1099 and my client asked if I can assist them with the issue because they wanted to keep the business relationship, with POA I called and found out the IRS had no records of the 1099.  Then I found out the IRS never received 2019 and 2020 1099’s for the main client, at that time we believed the IRS had not yet processed them because of the pandemic back log of returns and forms, so we resubmit them.  Just curious if someone else has encountered this?  

[Medlin Software, Dennis]

You can ignore the "person on the phone".  Their information is useless.  There are instances where 941's and W2's do not match, meaning while for most, they match, there are exceptions.

[Lee B]

What does the Penalty Letter say?

[ILLMAS]

19 minutes ago, cbslee said:

What does the Penalty Letter say?

Civil Penalty for 2019 but makes no reference to any forms.

[Lee B]

4 hours ago, ILLMAS said:

Client received a hefty penalty for payroll/1099 related forms for 2019 , , , , 

 

1 minute ago, ILLMAS said:

Civil Penalty for 2019 but makes no reference to any forms.

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[ILLMAS]

1 minute ago, cbslee said:

 

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First agent just gave me general information as to why they were assessing the penalty (agent was not helpful at all, compared to the one I spoke today), a couple of minutes ago another agent told me exactly what the problem was, as I had suspected the IRS never processed the 1099 package mailed in early 2020 and the second submission of information back in July 2021.  Once we write in, I have the confidence the penalty will be removed.