W-2 Civil Penalty

[rmc]

I have a new client who was just notified of a proposed civil penalty for late filing of W-2's for 2004. When I called Practitioner Hotline, they can't tell me WHEN they were filed, but there appears to be 2 sets? 1 set has 21, the other 22. Also, a former employee contacted them a few days ago and says he's being audited, that IRS has 2 W-2's for him for that year. Ugh.

Anyone have any experience on these civil penalties? I'm curious of ways to get them gone, reduced, etc.

I've been lucky, my regular clients don't get these.

Thanks!
MC

[djack1040]

Employment Forms-Civil Penalties

If your client has only "been notified of proposed civil penalties"; immediately send a written response explaining reasonable cause (prior preparer negligence for which the taxpayer had paid a fee for professional service for employment tax filing-W-3) or some other justification for the late filing.. I have had success on two occasions by writing before a penalty has been assessed.

If a penalty has been assessed, pay it and then file Form 843 (Claim for Refund and Request for Abatement).

As far as the apparent duplicate filing of the W-3 and the individual W-2's, you are going to have a problem with the SSA and the IRS. I would start with the IRS and see if Form W-3c can be used to cancel the apparent duplicate W-2's and also see if SSA has a procedure.

Good luck!

[veritas]

Did your client change payroll services during the year in question?

[S T]

Duplicates

I agree with Djack above, but probably start with SSA, the forms W3 transmittal and W-2's are submitted directly to SSA, then they provide IRS with the information.

I couldn't find anything on the SSA.gov website to assist you, so probably you will have to make a phone call.

Sandy

[Jiggers]

Duplicate W-2's

Surely the notice for the civil penalty is not the first notice that the client received. I would ask what other notices have been received before this. If he says none, out the door, as I don't want to deal with a liar. Sorry to be so rough, but it just irks me when clients do this. Or, worse yet, bring me a stack of IRS notices unopened dating back several months. And then want us to perform miracles.

[Black Bart]

Anyone have any experience on these civil penalties? I'm curious of ways to get them gone, reduced, etc.

MC

Yes. Have the client write them a letter (civilians are viewed more sympathetically that tax preparers) in dull pencil on cheap, ruled primary tablet paper. Tell him: Give the best excuse you have. If you don't have one, make up something -- illness is best (be vague and don't mention that it was a head cold), but being out of town and away from your books in another part of the country (don't mention that it was a vacation) occasionally works. Say it was all a mistake. Say it was out of your hands -- that you were a victim of unfortunate circumstances beyond your control. Promise you'll never do it again and all subsequent documents will be filed promptly and properly. Tell then you're a solid taxpaying citizen. Tell them the amount of the penalty will be a hardship to your family -- adversely affecting your business. Say you're going to write all your elected representatives (mention their names) about this completely unjustified, enormously excessive, and outrageous penalty . Be extremely sorry and contrite about this whole dreadful misunderstanding. Be penitent. Be pathetic. Cross your fingers.

Do all that...and there's at least a 50% chance of abatement. Hey; I know it's not good odds, but where are you now?

[rmc]

Thanks,...

Thanks to all of you for your great responses. It did appear to be a first notice as is a proposed penalty.

I'll check back in the future to post our results.

MC

[Unregistered]

I asked earlier if the company changed payroll processors during the year. We have seen cases where ADP & Paychex send in W2 info at year end even if you terminated their services. So you get two sets of W2s reported causing big problems.