Discussion:NOL and penalty

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Discussion Forum Index --> Basic Tax Questions --> NOL and penalty


Discussion Forum Index --> Tax Questions --> NOL and penalty

Taxoncall (talk|edits) said:

2 July 2008
In the carryback year a late payment penalty with interest was assessed. When Form 1045 is prepared and zero tax is due in the carryback years does the tentative refund include a refund of the penalty and interest that was paid.

Fsteincpa (talk|edits) said:

2 July 2008
Interesting concept. although, speaking off the cuff, I would imagine the answer is no. would be pretty cool if you could get that back. Although, don't they pay interest on the refund anyhow? so, you do get that part back.

Riley2 (talk|edits) said:

2 July 2008
Late payment penalties are not reduced for changes made to the return after the original return was filed.

Interest cannot be abated as a result of an NOL carryback. Sec. 6601(d)(1).

Loisellecpa (talk|edits) said:

24 January 2011
Riley - I have this exact situation. Unless I missed it, Sec 6601(d)(1) deals with interest. Do you know the Code ref or authority that shows that payment penalties are not reduced for changes made to the return after the original return was filed?

Trillium (talk|edits) said:

24 January 2011
Lois, see Discussion:Penalties and interest from audit when NOLC/B zeros out taxable income, I believe Dave provides the cite you are looking for.

Also, FYI, the most recent discussions show up at the bottom of the search results, and those often may be more applicable than the "page title matches" up at the top of the page - e.g., this discussion is a Page Title Match and would have been at the top of most search results if you searched for [NOL penalty], but some of the discussions that had matches in the article content were actually more helpful for your particular needs.

DaveFogel (talk|edits) said:

24 January 2011
The discussion that Trillium refers to addresses the accuracy-related penalty of IRC §6662. As for the late payment penalty of IRC §6651(a)(2), since the penalty is based on the tax shown on the return, it is unaffected by an NOL carryback.

Csg (talk|edits) said:

24 January 2011
I just spoke with an IRS agent about this very issue. His viewpoint was the tax was due when filed, and the taxpayer didn't know about the NOL at that point, so the penalty and interest are still due. Our taxpayer filed on extension, and did, in fact, know about the NOL, so that actually isn't the issue.

The NOL does not abate the penalty and interest.

Mscash (talk|edits) said:

25 January 2011
Don't think of the NOL adjustment amount as a reduction in the original tax but instead as a payment made on the due date of the return with the NOL. The credit is posted on that date for late payment penalty and interest computations. A Sec 6662 penalty would not be affected.

Trillium (talk|edits) said:

1 July 2011
edited to add: Also see Discussion:Penalty_abatement_from_loss_carryback, where Riley provides a cite for the "no" response w/r/t penalties.

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