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In response to
"So my wife's CPA forgot to file her 2016 tax (we just randomly found out a few weeks ago). He filled them now and sent an invoice. -- (edited)"
by
James Bond (aka Igor)
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Was all the tax paid? Generally there is no penalty for filing late if the tax was paid on time.
Posted by
Covington (aka CovingtonCat)
May 15 '18, 09:06
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If penalties are assessed they can be abated if she did not file or pay late the previous 3 years. You just call them up and ask for a "first time abatement." I the tax wasn't paid she's still on the hook for interest on the late paid tax.
If she doesn't qualify for FTA then you have to present a reasonable cause for the IRS to abate a penalty. It is sometimes possible to blame the preparer for not doing his/her job, especially if you have documentation that the work was paid for and the preparer gave an indication that the returns would be filed. If that argument doesn't work you can file an appeal. Filing an appeal is as simple as writing a letter and providing a copy of the first denial letter. But it can take several weeks, or more, before there's a decision.
If you are denied an abatement I recommend paying the penalties and interest. You'll get your moeny back with interest if you file an appeal and win. Otherwise, you'll owe more interest.
This is for federal tax, btw. California may have similar policies for state filings.
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