top of page

Do you Owe for Late Filing?

Your firm (or you) *may* not have to pay that IRS Penalty.

Taxpayers who missed one or more deadlines in 2020 may qualify for the IRS’s First Time Penalty Abatement policy. Under the policy, the IRS might relieve penalties for failing to file a tax return, pay taxes on time or deposit taxes when due.

To qualify for abatement requires the following: You did not previously have to file a return or you have no penalties for the 3 tax years prior to the tax year in which you received a penalty. You either filed all currently required returns or an extension. You have paid, or arranged to pay, tax due.

The IRS recommends calling the phone number on the penalty notice to see if you qualify. [Tax Notes Today; Penalty Relief Due to First Time Penalty Abatement or Other Administrative Waiver/IRS]

SSA letters should get immediate action.

The Social Security Administration (SSA) is just now mailing letters to employers that filed 2019 Forms W-2 with employee names/SSNs that did not jibe with SSA records.

Because a mismatch can be caused by typos, unreported name changes, inaccurate or incomplete employer records, or other problems, the SSA letter says:

If you receive this letter, review it, then verify and correct the inaccurate data. The letter will include an attachment with instructions on how to register for and use Business Services Online (BSO) to view name/SSN mismatches and how to file a W-2C with the IRS.

Why “immediate” action? To make sure your 2020 W-2s are correct so you do not have to file a 2020 W-2C.

IRS penalties, too: The SSA shares its data with the IRS, which can impose penalties for: failure to file timely (information returns with errors are considered information returns not filed); failure to include required information on a W-2 incorrect W-2 information (a name and/or SSN that does not match government databases); and for

files on paper when required to file electronically.

Penalties. $280-$560 per inaccurate W-2 (there can be multiple penalties for the same mistake on a W-2).

From the January 2021 issue of the AIPB's publication: The General Ledger

bottom of page