reasons for abatement penalty please

[WITAXLADY]

Client used First time abatement penalty back in 2013 for Fed w/holding - EFTPS

Got behind during Covid - good reason!

So denied abatement -

Could someone steer me to another reason to abate penalties?

They are recovering but having to pay the penalties is overwhelming and triggers Civil Trust fund.

Please any help would be appreciated (son-in-law)

Thx D

 

[Lee B]

Are we talking about Payroll Trust Fund taxes not being paid/

[Max W]

"Got behind during Covid" , may or may not be an acceptable reason.  If his business continued to run during covid or there was more than one quarter involved, it would be likely reasons for rejection..

I don't know what 2013 has to do with it.  The IRS only looks back 3yrs/12qtrs.

 

[Robbie]

First time abatement penalty can be used again after four years.  Alternative is reasonable cause for a penalty abatement.  However I requested the FTA and includes a reasonable cause abatement request due to illness for a penalty on a 2019 return.  Both were denied for no clearly stated reason and I have filed an appeal.  Covid shut down has prevented any action other than denials of the request for abatement.  So every 90 days or so we get a letter saying they need more time to process the appeal.  It's ridiculous. The FTA is statutory and shouldn't be discretionary on the part of the agent, but they can't seem to get that fact through their thick heads.

 

[Lee B]

If we are talking about unpaid Payroll Trust Funds (Employee WH and Employee share of SS and Medicare) then you are in a whole different ballgame.

4 hours ago, WITAXLADY said:

 

Please any help would be appreciated (son-in-law)

Instructions for Form 843:

"An abatement of tax, other than income, estate, or gift tax. Employers cannot use Form 843 to request an abatement of FICA tax, RRTA tax, or income tax withholding."

As George H W Bush was fond of saying, "you are in very deep doo doo!"

[WITAXLADY]

very deep - but they did stay open! = kept employees,  takeout did well

and coming out of the deep hole - but the additional $$$'s for penalties make an installment plan not feasible..

[Lee B]

Keeping your business open by not paying your Payroll Trust Fund taxes is a really bad idea

because the business owners are personally liable and filing Bankruptcy provides no relief.