5500EZ Proposed Penalties

[Guest RLMCPA]

My client is a retired minister 85 years old. He has been retired for 20 years. His self employed pension plan has assets of $ 980,000.00. We received notices that the 5500EZ was not filed for 2004, and we responded with a signed return to comply with the notice. Same senario for 2005. We have now been sent proposed penalties of $15,000.00 and $ 11,825.00. We are pretty sure that 2006 was not filed eventhough we have not received any notification. 2007 5500EZ is in the office for filing. My 85 year old client has Alzheimers Disease and my first question is whether that would qualify as " Reasonable Cause". My second question is whether we should notify the IRS that we have related proposed penalties for 2004 and 2005 and most probably 2006 and request that the case be handled as a group or each year separately.

[jpod]

It sounds like you may have the makings of a good "reasonable cause" argument. Advise your client that it would be beneficial to get a letter from his physcian and to be up front with the IRS concerning 2005 and 2006 as part of the effort to demonstrate reasonable cause.

P.S. Has your client taken annual MRDs?

[Earl]

IRA time