5472

[KATHERINE]

Hi dear friends here,

Happy New Year! 

I filed a client filed 2019 & 2020 Form 1120 in September 2021.   Both years required 5472.  2019 had extension (client provided previous accountant efile conf);  but 2020 did not have extension ( Client did not know, and cannot provide any proof of extension filed). 

IRS did not assess any late filing or paying penalty for 2019 nor 2020 (2019 filed with a tax due payment; 2020 had a loss, no tax due with efile).

But they assess $25k each year for filing 5472 late, which is total $50K.  I filled out abatement form 843 applying reasonable cause : 2019 was late because the previous accountant passed away in 2020 Spring and client did not get any notification from the company who continued the service.; 2020 did not file extension for same reason.   Now, both years were filed properly before IRS sent the notice out, so there is no intension from client to void filing responsibilities.  

They rejected and still demand money.  

I called them after received the notice rejected the my previous correspondence, they said they cannot apply First timer for 2019  because he did not know whether this type of penalty qualify First timer (6038 penalty).

Who can afford the penalty they are asking?  But they are so determine to collect it.  

The shareholder has a green card case ongoing, and has social number allows to work too.  Moreover, he has been staying in US since 2017 more than 300 days each year till now.

Is there any way I can get away from the penalty?

Thank you!

Kate