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.
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It has always been my understanding that the IRS will abate penalties but that they are required by law to assess interest.
It has always been my understanding that the IRS will abate penalties but that they are required by law to assess interest.
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.
There is no way to abate interest - it is mandated by statute.
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!
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.
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