CHAPTER 6Tax Penalties
Of the six billion dollars in employment tax penalties levied by the IRS in 2018, over half according to the “IRS Data Book” were abated after being questioned by taxpayers or their representatives. So the odds are good that the IRS is wrong or made a mistake. What do you do to get an abatement?
The normal problems with payroll taxes are:
- Failure to file or failure to file timely.
- Taxes underreported.
- Taxes underdeposited.
- Taxes deposited late.
Any of these can create a situation where the taxing agency charges penalties and interest against a business and then sucks up subsequent tax deposits, creating additional late and short payments and simply exacerbating the situation.
Read the notice from the IRS (we are just going to refer to the IRS but everything applies to state and local notices as well). It should tell you why they are charging a penalty and interest and how it is calculated. If the notice does not lay out that information, you may have well missed or not received the first notice from the IRS. That is not at all unusual. If you don't have the first notice, then call or write the IRS and get all the information from them. Also ask them to fax or send you a “Statement of Account” for the period ...
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