Payment Strategy

[Snaggletoof]

Client has a $4000 payroll tax penalty. Does not involve trust fund but is penalty ONLY.for depositing one day late. IRS has confirmed this penalty and suggested we need to pay it and then appeal.

My general feeling is that if we pay this, the appeals officer (who has a separate address) will disregard the appeal, or put it into that big stack of paperwork that he will get around to after his 5th week of civil service vacation. (You might detect I've got an attitude problem about this already)

What does your experience reveal about paying FIRST? My gut tells me as long as we haven't paid, the matter will get attention focused on it. If we pay then there is no compunction on the govt to really do anything.

What say ye?

[WhiteOleander]

Most penalties will not be abated unless they are paid first. They did change the rules for RMD on IRAs. But, I don't think the rule changed for other penalties.

[Gretel]

What does your experience reveal about paying FIRST? My gut tells me as long as we haven't paid, the matter will get attention focused on it. If we pay then there is no compunction on the govt to really do anything.

What say ye?

I cannot contribute with my own experience but you always have the option to file form 911 and let the Advocate service deal with this if it takes too long. They get things done in no time (from my experience).

[gboykin]

I have had success by calling the number on the notice and asking for abatement. If it is the first time they have been late, one negotiating tool is to make any future payments through EFTPS. In every case, they have waived the penalty as long as the future payments are on time and made through EFTPS.

[ChEAr$]

I have had success by calling the number on the notice and asking for abatement. If it is the first time they have been late, one negotiating tool is to make any future payments through EFTPS. In every case, they have waived the penalty as long as the future payments are on time and made through EFTPS.

Ditto. That is what I would do.

[Snaggletoof]

Abatement

We have asked for an abatement through normal channels. It has been denied and we have been told it can be appealed.

The penalty was in fact due to a one-time phenomenon. In prior years, this would have been abated. No more. Everyone is hard-pressed for revenue and IRS is no exception.
Problem is, employers are prevailed upon from every direction to collect money for other agencies. They are not paid for the service, do not have their heavy administrative burdens reimbursed, and are penalized at the least little violation of a complex tax code.

The employer is having to lay off people. This amount of penalty would keep one of his employees working for some six weeks or so.