Level 2

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Client received a letter from the IRS stating there was a 2018 schedule D worksheet error and they would receive a follow up letter with the amount of additional tax due.

Forum|Forum|6 years ago
December 7, 2019
9 replies
86 views

Client received the letter and the IRS is accessing additional tax of about $3,300. In addition they are accessing interest of $88. Client is willing to pay the additional tax but is balking at the interest. I've never had a situation like this. Is there any way to abate the interest. I agree, it's not really fair given that the form was changed after the filing deadline.

ProSeries Professional

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Best answer by poolcleaner

It has always been my understanding that the IRS will abate penalties but that they are required by law to assess interest.

T

terishaw1040sfAuthor

Level 2

To further clarify, this was not my error. The client is in the 28% tax bracket and the 2018 worksheet for that tax bracket was not finalized until sometime in May, 2019, well after the tax return was filed. The client was not accessed penalties, just tax and interest. People have responded that the IRS is mandated by law to access interest, regardless of the cause and I thank them for their response. I do not plan on paying the interest for this client nor are they asking me to.

Accountant-Man

Level 13

We know it's not your error, but IRS doesn't remove interest except interest on penalties. If they remove the penalties, a portion of the interest goes away too.

** I am "Elevating with Intention!"

G

gabletax

Level 5

That's the cost of having access to $3,300 of IRS's money for several months. Not fair, I agree, but presumably they had the benefit of the funds in their possession and were using the funds for about six months. $88 isn't an unreasonable amount for using $3,300 of someone else's money for six months. I know--clients don't think too much of that line of reasoning. Nor would I, in their shoes.

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poolcleanerAnswer

Level 8

It has always been my understanding that the IRS will abate penalties but that they are required by law to assess interest.

Just-Lisa-Now-

Intuit Community Champion

IRS is adding interest onto the refunds that are being sent out due to that Sch D error, seems logical that they charge interest on the ones that ended up with a balance due.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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TaxMonkey

Level 7

There is no way to abate interest - it is mandated by statute.

Accountant-Man

Level 13

A client's S corp just got a NJ notice with interest for installments. It is probably my fault; it is a new corp so they shouldn't owe anything, but it was $50.47. I paid it, and the client's response was "We appreciate your integrity!"

That was worth $50.47!

** I am "Elevating with Intention!"

George4Tacks

Level 15

especially if the S-Corp learns to mind their business better.

Answers are easy. Questions are hard!

George4Tacks

Level 15

Since you prepared and reviewed the return, it would be reasonable for you to pay the interest. It also helps to build client goodwill. You could then ask ProSeries to reimburse you, if it was a software failure.

Answers are easy. Questions are hard!

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