Will IRS assess a late FILING penalty if.......

[dkh]

My client made payment with extension in May.  When I finally complete the return there is actually more tax due which client paid  in October   however  the return was not efiled.      So my question is since all tax was paid by the extension deadline will IRS assess a late filing penalty since return is efiled in November. 

Let's not get into why I had a DA attack and never efiled the return. I've already beat myself up over it.   

[Just-Lisa-Now-]

the money was due back in May, as long as the return got filed by Oct 15th, no late filing penalty , but youre probably still looking at some late payment penalty for what didnt get paid until October.

oh wait, you said it didnt get Efiled by Oct 15th.....I think you still may be looking at a late filing penalty since all the money due wasnt paid by the original due date and the return wasnt filed timely.

[TaxGuyBill]

If I remember correctly, the late-filing penalty applies to any unpaid amount due as of October 16th (because you filed a valid extension).

The late-payment penalty applies to any unpaid amount due as of April 16th (May 16th this year).

[BobKamman]

But there is no late-payment penalty, if 90% of the tax is paid when the extension is filed?  And of course, everyone gets one free pass.  So don't let it happen again, if they do come up with a penalty. You probably won't know until April, because it will show as "full-paid" and be shelved until all the balance-due returns are processed.  

[dkh]

I wonder how the IRS system will process since it is "full-paid" when the return will be processed.   Does it assess automatically or will it kick out to be manually processed.

Yep prepared to ask for abatement - shouldn't be a large penalty   Just hate that it is even a possibility.

[Norman2001]

Here's what the IRS says:

"We calculate the Failure to File Penalty based on how late you file your tax return and the amount of unpaid tax as of the original payment due date (not the extension due date). Unpaid tax is the total tax required to be shown on your return minus amounts paid through withholding, estimated tax payments and allowed refundable credits."

https://www.irs.gov/payments/failure-to-file-penalty

It seems that there would be a late filing penalty due + interest.

[dkh]

Yes but what I am wondering is if anyone has had any actual experience with this situation.   Paid late and filed later.....did it truly result in a penalty ?       

I like to worry about things before they actually happen lol.

[BobKamman]

I was going to point out in my earlier post that IRS is totally clueless when it comes to this, but it was getting late and I didn't think anyone paid much attention to them.  Better to read Section 6651(a), which clearly states:

In case of failure—
(1)to file any return ... on the date prescribed therefor (determined with regard to any extension of time for filing),. . .

[IRonMaN]

I heard a huge asteroid was going to hit the earth next week which will kill all of us and bring back the dinosaurs.

Just thought I would give you something else to worry about to get your mind off worrying about the potential of getting a penalty 😀

[dkh]

Thanks for that distraction    

[IRonMaN]

You betcha!

[BobKamman]

@IRonMaN  So now that you have learned how to spell tattoos, can you do something about Tasmanian?

I've been to Tasmania.  I've seen some devils.  What I remember most, though, are the slot machines in the Hobart pub where I stayed.  The traditional kind, with upstairs lodging.  They call the machines "pokies," because they were originally based on poker hands.  I kept winning, night after night.  When I finally cashed in my real Australian dollar coins for real Australian plastic currency, the cashier was surprised to learn that in Las Vegas, tipping is acceptable.  A sign above the cashier window points out that tipping the cashier is illegal under penalty of law.  

[IRonMaN]

Well, at least now we know who to direct all of the Tasmanian tax questions to.

[TaxLaw]

same issue all monies paid 6 weeks prior filing date. How to remove remove IRS penalty from program prior to electronic filing?

[dkh]

Program won't calculate late payment penalty/interest unless you enter a date into the Late Penalties and Interest Worksheet....so delete any entries on that worksheet.   If it's an underpayment of estimate penalty, go to Form2210 check box C to have IRS send bill if penalty due.

[TaxGuyBill]

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@TaxLaw wrote:

same issue all monies paid 6 weeks prior filing date. How to remove remove IRS penalty from program prior to electronic filing?

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As was mentioned above, if ProSeries is calculating a penalty, most likely you are looking at the Estimated Tax Penalty.  That DOES often applies even if payments were made by April 15. (the Estimated Tax Payments were due to to paid during the prior year on April 15th, June 15th, September 15th and January 15th).