Failure to File v. Failure to Pay

The letter imposing penalties and interest specifies failure to file and failure to pay.

Did he ask you to file an extension and you forgot or do you normally file extensions for some clients out of courtesy and this one just got missed on your list?

1) Plug in the $23000 as paid with the extension.  Compare the math.... then take that info out.

2) Review the F 2210

3) In Lacerte, there's a place to enter 'compute late filing penalty'.... if PTO has that, take it out or override it. 

And I'm curious as to the answer to Jeff's questions.  Plus, did this client stay in contact during the year so that the $ 23000 owed was anticipated?

Isn't it all failure to file for the first five months, and then the 1/2% failure to pay kicks in?

But the first thing to do is find out if he qualifies for "first time abatement."  

I'm not sure that "reliance on negligent preparer" works as reasonable cause these days, but it's worth a try if FTA is not available.   

The Internal Revenue Manual doesn't provide much wriggle room, but it doesn't say absolutely not.  It's worth a try.  I'd make a written request, signed by him under penalty of perjury, but also including a statement from you, signed under penalty of perjury, that this was a rare occurrence and that you have updated your office procedures to avoid the same oversight in the future. 

I mean, it's not like he didn't report a sack of $50,000 cash he received.

20.1.1.3.2.2.5 (11-21-2017)
Erroneous Advice or Reliance
Each request for penalty relief should be reviewed thoroughly to determine the exact basis of the taxpayer's request.
Is the taxpayer claiming they did not comply due to specific advice they received from someone, whether orally or in writing, or
Is the taxpayer claiming they relied on someone else to comply on their behalf?
Certain sections of the IRC and Treasury Regulations provide relief from certain penalties based on erroneous advice. See IRM 20.1.1.3.3.4, Advice, to first determine if a statutory exception or administrative waiver applies.
If the taxpayer states they relied on written or oral advice from the IRS but does not qualify for relief in accordance with the criteria in IRM 20.1.1.3.3.4.1, Written Advice From the IRS, or IRM 20.1.1.3.3.4.2, Oral Advice From the IRS, refer to IRM 20.1.1.3.2.2, Ordinary Business Care and Prudence, to determine if the taxpayer exercised ordinary business care and prudence in relying on the IRS's advice.
The taxpayer may try to establish reasonable cause by claiming they relied on another party to comply on their behalf. Generally, this is not a basis for reasonable cause, particularly for filing or paying obligations, since the taxpayer is responsible for meeting their tax obligations and that responsibility cannot be delegated. However, other factors to consider include:
Was the taxpayer unable to comply because they did not have access to their own records? See IRM 20.1.1.3.2.2.3, Unable to Obtain Records.
Was the failure to comply due to a change in the tax law the taxpayer could not reasonably be expected to know? See IRM 20.1.1.3.2.2.6, Ignorance of the Law.
Consider all facts and circumstances presented by the taxpayer to determine if, despite the exercise of ordinary business care and prudence, the taxpayer nevertheless was unable to comply.