Comm’r, T.C. Summary 2012-55 (6/14/12) – considering the scope of the reasonable cause language to the Code Sec. 6699 penalty for late filing of an S corporation return, the Tax Court determined that the failure to timely file a 2008 1120-S tax return was due to reasonable cause not subject to penalty. The following are the facts as I understand:
What does sec.6699 mean for S Corp?
The 1120-S form itself was dated February 24, 2009. 7. Code Sec. 6699 basically states that an S corporation not timely filing its annual tax return is liable for a per-shareholder penalty for every month the tax return is late up to 12 months.
Do you have to pay the penalty if you file late?
If you timely requested an extension of time to file your individual income tax return and paid at least 90 percent of the taxes you owe with your request, you may not face a failure-to-pay penalty. However, you must pay any remaining balance by the extended due date.
When does a failure to file penalty apply?
A failure-to-file penalty may apply if you did not file by the tax filing deadline. A failure-to-pay penalty may apply if you did not pay all of the taxes you owe by the tax filing deadline.
When did ensyc technologies file its tax return?
Ensyc Technologies, an S corporation operated entirely by its president who works from his home in Idaho with the assistance of subcontractors, had its tax returns prepared by an accountant in Nevada. 2. Ensyc’s annual tax return for 2008 was due March 16, 2009. 3.
When is the due date for small business tax return?
The due date is Tuesday, April 16 if Monday, April 15 is a legal holiday. Here are the tax return due dates for small business taxes: Extensions have two deadlines. The first is for filing the application for the extension, followed by the deadline for filing the tax return at the end of the extension period.
What is the penalty for filing taxes late?
The penalty for filing late is 5% of the total tax assessed that was not paid when due. It is charged each month or part of a month the return is late, for up to 5 months. The penalty for paying late is initially ½% of the unpaid tax shown on the return. It is charged each
Why was ensyc not liable for the IRS late filing penalty?
The IRS Office of Appeals determined that Ensyc did not timely file a Form 1120S nor did it have reasonable cause for failing to timely file the form and sustained the levy. 11. Ensyc took the case to the Tax Court, arguing that it was not liable for the late-filing penalty because it mailed a Form 1120S on March 16, 2009. 12.
What happens if you fail to file S corporation tax return?
The failure to file penalty for S corporations is assessed against the S corporation, not against any individual shareholder. Shareholders are not directly liable for the penalty. Getting back into compliance Remember, the law says you must file all required tax returns.
When to file for late filing tax relief?
Proc. 2007-62 resolves this issue when the failure to timely file the election is discovered prior to the filing of the tax return, by providing that the request for relief should be filed with Form 1120S.
