Penalties Archives - Tax Resolution Specialist Training

How does the 10 year collection statute work on the trust fund penalty?

The 10-year statute of limitations on collection applies to an individual’s Civil Penalty stemming from the Trust Fund Recovery Penalty (“TFRP”) in the same manner as it does for income taxes. Keep in mind that the IRS can “passively” collect beyond the statute if they filed a perfected tax lien.

How does the 10 year collection statute work on the trust fund penalty?David Karp2016-05-13T14:46:40-07:00

If Trust Fund Recovery Penalty (“TFRP”) is assessed to a previous president and there is doubt as to whether he was a responsible person and willful; and the Corporation recently filed for bankruptcy, what should be done?

If the TFRP was assessed to the previous president he most likely received correspondence from the IRS requesting a 4180 interview to determine if he was responsible for not paying the payroll taxes and the IRS determined he was responsible. Either the past president ignored or did not receive the notice (we have a current [...]

If Trust Fund Recovery Penalty (“TFRP”) is assessed to a previous president and there is doubt as to whether he was a responsible person and willful; and the Corporation recently filed for bankruptcy, what should be done?David Karp2017-04-11T22:23:03-07:00

Do you include upcoming Obamacare/HCA penalties and/or Health Insurance cost for MDI?

Health insurance premiums are allowable and should be included in both installment agreements and offers in compromise. As for the ACA penalties, I would include them and see if the IRS fights you on this. It remains to be seen whether they will allow the expense or not.

Do you include upcoming Obamacare/HCA penalties and/or Health Insurance cost for MDI?David Karp2016-05-13T14:45:50-07:00

How should I advise and represent a client who came to me and indicated that he has an offshore account, did not report on any tax returns and did not file FBAR reports? Right now I am referring these people to an attorney, but would like to represent them myself if possible. How does amnesty work right now and how much of a penalty must be paid?

The IRS currently is offering the Offshore Voluntary Disclosure Program (“OVDP”) that began in January 2012. However, the IRS has reserved the right to end the program at any time. For that reason, we urge you to review the IRS OVDP page (see http://www.irs.gov/uac/2012-Offshore-Voluntary-Disclosure-Program) as well as the Frequently Asked Questions page (see http://www.irs.gov/Individuals/International-Taxpayers/Offshore-Voluntary-Disclosure-Program-Frequently-Asked-Questions-and-Answers-2012-Revised), and [...]

How should I advise and represent a client who came to me and indicated that he has an offshore account, did not report on any tax returns and did not file FBAR reports? Right now I am referring these people to an attorney, but would like to represent them myself if possible. How does amnesty work right now and how much of a penalty must be paid?David Karp2017-04-11T22:23:03-07:00

We didn’t cover anything with penalty abatement today (not that I was expecting it according to the agenda) and I wanted to see if you offered any suggestions on penalty abatement for late filing. I have a client that had five years of 1120S returns (single shareholder) that needed to be filed recently to get him back into compliance. Beyond the obvious, is there something out there that can be applied to help abate the late filing penalties for S-Corps? I know about “reasonable cause”, but the client doesn’t really have a good reason for not filing. Obviously Rev Proc 84-35 does not apply from what I understand because this is not a partnership. We discussed dissolving the company and starting over to make the penalties go away, but I do not want to participate in something to be considered as fraud. The business is small only shows a profit of $15K to $30K over the five years so the penalties are pretty tough in comparison to the income (around $10K or so over the five years). Any suggestions outside of the obvious are definitely appreciated. Thank you.

In terms of requesting abatement of penalties for non-filing for 5 consecutive years is an uphill battle and other than “dumb luck” the request will be denied. In and of itself starting over is not committing fraud but without having all of the details I cannot provide guidance in this case. Keep in mind that [...]

We didn’t cover anything with penalty abatement today (not that I was expecting it according to the agenda) and I wanted to see if you offered any suggestions on penalty abatement for late filing. I have a client that had five years of 1120S returns (single shareholder) that needed to be filed recently to get him back into compliance. Beyond the obvious, is there something out there that can be applied to help abate the late filing penalties for S-Corps? I know about “reasonable cause”, but the client doesn’t really have a good reason for not filing. Obviously Rev Proc 84-35 does not apply from what I understand because this is not a partnership. We discussed dissolving the company and starting over to make the penalties go away, but I do not want to participate in something to be considered as fraud. The business is small only shows a profit of $15K to $30K over the five years so the penalties are pretty tough in comparison to the income (around $10K or so over the five years). Any suggestions outside of the obvious are definitely appreciated. Thank you.David Karp2016-05-13T14:44:50-07:00

Is it possible to have penalties removed?

Yes. There are various reasons used to request abatement for reasonable cause but the most commonly accepted method is to request a First Time Penalty Abatement (“FTPA”) based upon IRS rules.

Is it possible to have penalties removed?David Karp2016-05-13T14:44:27-07:00

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How does the 10 year collection statute work on the trust fund penalty?

If Trust Fund Recovery Penalty (“TFRP”) is assessed to a previous president and there is doubt as to whether he was a responsible person and willful; and the Corporation recently filed for bankruptcy, what should be done?

Do you include upcoming Obamacare/HCA penalties and/or Health Insurance cost for MDI?

Is it possible to have penalties removed?

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