Corporate Return Question

[Chrisbry]

It's been so long since I've had one of these but what are the penalties (if any) for filing a Form 1120 without a Form 2220? Will IRS just send a balance due notice for the underpayment penalty? One penalty is $33 and the other is $43. Have they begun assessing Preparer penaltys on the underpayment forms?

I've got 2 corps that have the Form 2220 but ATX is now saying the draft is tentatively scheduled to not be approved until March 10. Knowing the history in the last couple of months, I don't look for that form to be approved for filing (or efiling) until well after the 15th.

[RoyDaleOne]

You could pay the amount due and extend the returns with all taxes and penalties paid. File when forms become available.

[Chrisbry]

You could pay the amount due and extend the returns with all taxes and penalties paid. File when forms become available.

Thanks Roy -- as hard as it is to believe -- I don't do extensions. :lol:

[Booger]

It's been so long since I've had one of these but what are the penalties (if any) for filing a Form 1120 without a Form 2220? Will IRS just send a balance due notice for the underpayment penalty? One penalty is $33 and the other is $43. Have they begun assessing Preparer penaltys on the underpayment forms?

I've got 2 corps that have the Form 2220 but ATX is now saying the draft is tentatively scheduled to not be approved until March 10. Knowing the history in the last couple of months, I don't look for that form to be approved for filing (or efiling) until well after the 15th.

Chrisby, if I have a underpayment penalty on a corporate return, I believe that you can

include the penalty amount on the appropriate line of the 1120, without attaching the 2220.

This will get you around the problem of waiting for the 2220 "draft" to be approved.

Booger

[DonnaA]

I agree with "Booger." Discard the Form 2220, and include the penalty amount on the proper line. Or e-file now, without paying the penalty or including the 2220, and wait for a bill from the IRS. Don't count on ATX getting their act together anytime soon.

[JohnH]

I've never seen a preparer penalty assessed for failure to calculate a penalty or interest on a corp return. Is this something that is expected to start happening?

[Randall]

I agree with "Booger." Discard the Form 2220, and include the penalty amount on the proper line. Or e-file now, without paying the penalty or including the 2220, and wait for a bill from the IRS. Don't count on ATX getting their act together anytime soon.

Not sure about the 1120, but doesn't IRS say you can have IRS calculate the penalty on 1040 for you. In other words, is it mandatory to calculate the 1040 penalty? I'm not sure what I did wrong last year, but I had the 1040 penalty calculated and several clients got back that money. IRS didn't calculate the penalty. I've stopped calculating the penalty this year.

[Chrisbry]

Not sure about the 1120, but doesn't IRS say you can have IRS calculate the penalty on 1040 for you. In other words, is it mandatory to calculate the 1040 penalty? I'm not sure what I did wrong last year, but I had the 1040 penalty calculated and several clients got back that money. IRS didn't calculate the penalty. I've stopped calculating the penalty this year.

I know the IRS has been saying for years that they were going to start assessing preparer penalties for different things including the failure to calculate the penalty (have yet to see it happen).

The program will not let you e-file if you include the penalty on the Form 1120 without including the Form 2220. So the options will be to e-file without the penalty and Form 2220, file a paper return with the penalty override and no form or wait to see if the Form is approved before the March 17th deadline.

I think I'll take my chances, e-file the returns without the penalties and 2220 included, tell the clients that they MAY be assessed a penalty of $______.

I've got so many returns on hold because of "draft" forms and software problems this year. I almost dread picking up the next one for fear of what problems I will find.