Late filing Penalties and Amended Returns

[equinecpa]

If a client files a 2009 return late with a balance due, and then later on amends it resulting in a reduction in taxes for the 2009 year, will the late filing penalties also be reduced, or are they based on the original return only.

I've read the code and am unlear on its interpretation (imagine that!)

Here is a cut and paste of the code:

"1) to file any return required under authority of subchapter A of chapter 61 (other than part III thereof), subchapter A of chapter 51 (relating to distilled spirits, wines, and beer), or of subchapter A of chapter 52 (relating to tobacco, cigars, cigarettes, and cigarette papers and tubes), or of subchapter A of chapter 53 (relating to machine guns and certain other firearms), on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as tax on such return 5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate;"

[DaveO]

They will adjust it after they accept the amend and adjust the balance due.

[taxea]

It would also depend on whether the amended return would have resulted in a refund on the original. If not then the penalties may stand. The IRS will waive the penalty on a one-time basis if asked to.