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$150,000 Penalty


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DB Plan, owner only, and EZ Filer. Recived a IRS notice 238, that for PYE 12/31/2017, penalty of 150k. He has filed all timely. Even more perplexing is that the notice states clearly that for plans up to 12 31 19 the max. penalty is 15,000 and  for forms due after 12/2019 max penalty is 150,000. Since this notice is for the 2017(due prior to 12/2019) year why are they charging above the 15,000 maximum.penalty? I did hear that OGDEN (where they recive the 5500EZ filings) was still closed at October 15, 2020. Are they processing the 2019 fotms now and saying that they are late? On the other hand the notice says this is fire the 12/31/2017 year end. Thank you very much.

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7 minutes ago, chc93 said:

Looks like the Notice 328 is for late Federal tax deposit penalties.  Is that what's happening?

I apologize , the notice is a CP283 notice for late filing of form 5500. However, as i wrote above it is for the 2017 year end filing and that was capped at 15,000 per this notice. So why are they charging 150,000. Also, the form was filed timely. I did hear that OGDEN (where they recive the 5500EZ filings) was still closed at October 15, 2020. Are they processing the 2019 fotms now and saying that they are late? On the other hand the notice says this is fire the 12/31/2017 year end. Thank you very much.

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12 minutes ago, chc93 said:

Looks like the Notice 328 is for late Federal tax deposit penalties.  Is that what's happening?

Wow... I just noticed that I had a type too... 238 instead of 328.  🤪

Otherwise, my only comment is to call the IRS.  From the IRS website... call 877-829-5500.  Is this the number on the notice?

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Last year, they sent out notices for pre 2020 plan years using the post 2019 penalty.  This was fixed at the time, but may back again.

It is not that uncommon to have wrong dates on these notices, so could be either really.

Agree with above, call the IRS (with a POA so you don't spend 3 hours on hold just to have them say I cant talk to without a POA)

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Don't mean to hijack this thread, but I have the same issue.  They are asking for a $300,000 for a 2014 and 2015 return.   Any advice? This is such an unusual situation.  I called the rep already who told me to just fax the documents, but the fact IRS is asking to pay the penalty in a month!  Problem is they are very slow to process anything.

 

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11 hours ago, flowersarenice said:

I called the rep already who told me to just fax the documents

IRS rep?

If the returns are truly late and you still have an opportunity to use the late EZ correction program, do so ASAP.  Even after they knock it down to the pre-2020 penalty amount, you want to take advantage of paying $1000 instead of $30,000

 

 

 

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I submitted the 14704 with all the returns and the check in Dec 2020.  It's just there are so many snafus in my case.  I faxed a response to the CP 283 form a day after I got it and spoke on the phone to the IRS rep.  Problem is not sure what happens after 30 days.   Am considering contacting the tax payer advocate.

 

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