Discussion:Penalty change after amendment?

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Discussion Forum Index --> Advanced Tax Questions --> Penalty change after amendment?


Discussion Forum Index --> Tax Questions --> Penalty change after amendment?

Dhtax (talk|edits) said:

25 August 2010
Another client with penalty issues: Client did his own return, filed and paid late for 2008, was assessed penalties and interest and paid them. He got a lot wrong, and I will now amend his return with the result being much lower tax. Riley2 wrote in another post: "Late payment penalties are based on the tax shown on the original return. See Sec. 6651(a)(2). In contrast, late filing penalties are based on the amount "required to be shown" on the return. Thus, if your client filed the corporate return late, the late filing penalty would be increased by filing an amended return. "

Does it work in reverse as well, so that if the amended return decreases the amount "required to be shown" the client's late filing penalty can be reduced? If so, how do I get the reduction?

DavidH

Tax Writer (talk|edits) said:

25 August 2010
If so, how do I get the reduction?

Just file the amendment and the client's account will be adjusted. If he is due a refund from the corrections, it can take up to 6 months to receive it (I've had one that took that long).

Mscash (talk|edits) said:

25 August 2010
If the amended return shows an over assessment, late filing and late payment penalties will be reduced to reflect the corrected tax. Estimated tax penalty will not be adjusted. If the amended return shows additional tax due, late filing penalty will be increased, estimated tax penalty will be unchanged and late payment penalty will accrue after the first bill under Sec 6651(a)(3).

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