1120S extension

[neilbrink]

For someone who did not file the 1120S or an extension by March 15, should we go ahead and file the extension now?

[grandmabee]

I don't think it would do any good. Just try to get the 1120S filed as soon as possible and ask for penalty waiver for the shareholders when the letters come.

[neilbrink]

In this case it is a single shareholder.

[JohnH]

Tell them the penalty meter is running at a rate of $195 per month.

Maybe that will get the client on the ball.

[Jack from Ohio]

A waste of paper and/or time to file an extension now. $195/mo should get his attention....

[taxxcpa]

Also explain that your fee goes up $25 per day for each day after the deadline.

[Randall]

You won't be able to efile the extension. But I'd put a paper one in the mail. Get the return done asap as others said. I had an LLC who elected S Corp treatment last year. Because he was an LLC the year before, I didn't have him on my March 15 radar and didn't get the extension in on time. I put a paper one in the mail. Got the return filed in May. He didn't hear anything back. I'm not sure if the paper extension got thru or IRS just didn't bother with it.

[neilbrink]

Obviously, the point of the March 15th deadline, and the penalties for not meeting that deadline, is to make sure the shareholders have their information in a timely manner. However, if there is only 1 shareholder, and it is only involving that one individual who is making that decsion, why would the IRS care if he decides to be late or not? It is only effecting his own personal return filing.

[Jack from Ohio]

Obviously, the point of the March 15th deadline, and the penalties for not meeting that deadline, is to make sure the shareholders have their information in a timely manner. However, if there is only 1 shareholder, and it is only involving that one individual who is making that decsion, why would the IRS care if he decides to be late or not? It is only effecting his own personal return filing.

The rule must apply across the board to be effective.

[JohnH]

Obviously, the point of the March 15th deadline, and the penalties for not meeting that deadline, is to make sure the shareholders have their information in a timely manner. However, if there is only 1 shareholder, and it is only involving that one individual who is making that decsion, why would the IRS care if he decides to be late or not? It is only effecting his own personal return filing.

Because the IRS business model has changed. Whereas in the past, many penalties were designed to encourage compliance and many penalties could be forgiven with a simple request , penalties are now viewed as a source of additional revenue. If you don't believe me, look at the fact that new legislation often refers to increased penalties as the revenue stream to offset tax cuts. So IRS is much less forgiving (and common sense doesn't count for much) when it comes to penalties.

[JohnH]

Also explain that your fee goes up $25 per day for each day after the deadline.

What's the rationale for arbitrarily adding to the fee?

IRS isn't punishing the client enough, so we need to add to the pain?

Seems like this flies in the face of doing what's in our clients' best interests.