Penalty or no penalty

[AccTaxMan]

I have a very unusual situation here.

Taxpayer has sent in his check for the balance due before 4-15-2010 for his 2009 tax return.

But, because of a mistake, the 2009 tax return has not been sent in yet.

Once aware of the mistake, he has already sent in his 2009 tax return immediately earlier this month.

So the tax return has been filed late, almost 1 year late.

But since the balance due has been paid before the due date last year, I am thinking there may actually no penalty. The reason is that, if I remember correctly, late penalty is charged based on unpaid balance due. Since there has been no unpaid balance due, the penalty should be $0. Am I correct?

[JohnH]

That's right. (Unless he owed an estimated tax penalty on the original filing, which will be back-billed).

Since the penalty is based on the balance due, his return will be considered late-filed but there will be no FTF penalty. The reason it will still be conisdered late-filed is because they could assess a FTF penalty if he is later audited and something else turns up in the way of tax liablity.

[MilTaxEA]

I agree. If he does later have a change to his return resulting in more tax, you can request to get the penalties abated due to reasonable cause.