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Penalty Kick

May 01, 2010 | Written by: Mark D. Olander, EA, USTCP
Businessman using magnifying to review balance sheet annual
Never assume that an IRS letter, bill or notice is correct: each item, figure, and computation should be checked for accuracy. This month’s case shows how having an experienced representative who pays attention to the details can make all the difference in resolving your case.

The member received a bill from the IRS for $1,424 and sent it in to TaxResources Customer Service right away. The Audit Representative reviewed the explanation for the charge and learned that the member was being assessed a late filing penalty of $89 per month for two shareholders of an S Corporation. However, in questioning the member about the S Corp, the Audit Representative discovered that the IRS had made a mistake: the member’s S Corp had only one shareholder, not two, and therefore the amount due should have been $712 for the 8 months it had been overdue. The Audit Representative went to bat for the member and persuaded the IRS agent to correct the bill and then to waive the entire penalty amount.

The member was pleased to receive a closing letter from the IRS showing no balance due. Below is an excerpt from the Thank You letter the Audit Representative received from the member:

I am very appreciative of the timely service and the kind attention to detail as well as the great result you achieved! You got my penalties removed! Thank you for your expertise.

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