1120S filing penalties



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taxguy623- The IRS has started actively assessing a late filing penalty to the corporation which is based on how many shareholders the corp has and how many months the return was filed late. The penalty is $89 per shareholder per month up to 12 months. I have seen 2 of them this year. In one instance the taxpayer never looked in the envelope when he picked up the return to see that there was something to sign and send. In the meantime, he filed his personal timely using the info from the K-1. We requested a one time waiver. He had never been late before.

In the other instance the taxpayer had an extremely bad year and trying to obtain the information to complete the tax return went beyond the extension time. We did the same for him, asked for a waiver.

Both of these taxpayers were late but both account histories showed timely returns and because of circumstances, we requested the waiver. We are waiting to hear.

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