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Video instructions and help with filling out and completing How Form 843 Credits

Instructions and Help about How Form 843 Credits

Really the thought is if you don't ask I mean I have a lot of people that are afraid to ask if you don't ask you absolutely will never ever get a penalty Bateman so even if you think it's a it's a stretch go ahead and ask I had one that I'm like I know I pretty much I'm just asking out of the blue because they're not going to give it to me and I had somebody give me I was helping an accountant that was actually on the hook for the penalty $70,000 penalty just because I asked guys don't be afraid of asking is the bottom line especially reasonable cause it's not like you get a black mark that you can only do it once in a lifetime for the taxpayer it's okay to ask for a reasonable cause and I do it a lot so don't let it intimidate you we are gonna go into a case study just to kind of help bring some of these ideas home so in the case of mrs. age she is elderly about 75 years old she is retired as well and has a really great heart I think H is how I came up the name for heart in this case she took a large amount of money out of her retirement in 2022 and in 2022 and gave it to her son for real estate investments in both those years it was meant to be alone but the son never ever decided to pay her back now what's happened is the relationship is strained and here she is stuck with the tax on that early distribution and and talking taking so much out of her retirement it was it was rough and she had the impression well it's tax free money to me right I didn't have to file that so later she gets assessed with a substitute for return and yes I was a basis and we fix all the tax return part but what do we do here we are all the taxes of my only been paid and we're stuck with just the penalties remaining the liability amounts you show here are just penalties so for thirteen fourteen and a little bit for fifteen these are all strictly unfortunately penalties $18,000 were the penalties that she got because of doing this to help her son as we look at the penalty and interest report and I was just kind of jumping ahead because I knew that was the answer in essence the failure you to file failure to pay a little bit of some other penalties in one own of the years case we get that that whole amount of that it's remaining is just penalties we look at the total penalties there between 13 14 and 15 and that basically is the amount you soing and it's spread out between failure to file and failure to pay the next thing that I go and do is I'm going to like look through the transcripts and kind of check out some more information and see and we redacted some of the information of course but in your slides you can kind of see what transcript looks like and there's those those penalty code numbers that that I'm talking about so looking at each of the years I'm looking at 2015-2022 here is you know penalties for you know filing the return of a due date for not paying the tax on time and she makes a payment for her tax but now what do we do we look at 2022 same thing there she's getting a penalty for each of these years and the reason I look at is we may be looking for those false positives positives and fortunate thing is all these are consecutive we don't have like one of the years having that nice three years break we get three years worth of penalties that are assessed it's it's not looking so good for them at the beginning 2022 we look in there and we say okay I don't see a penalty in the 2022 year I don't see one in 2022 or 2022 so it's just in those years so what would you do in this case she owes almost twenty thousand just in penalties is she a candidate for a first-time a bateman would it help her is she a candidate for a reasonable cause argument just instead of dragging this one out I'm going to kind of give you what the actual Brazil was a lot of it has to do with timing and are they owing are they going to continue to accrue more what's what's kind of going on right now in her case she paid the base tax I'm not worried about more penalties accruing any more because the base tax was paid so that is an important consideration to stop and say my timing of when I request this could mean everything but it sometimes some you know a little bit of penalty abatement is better than none at the time I did this case to you this is before all the rule changes where you only get once in a lifetime but in this taxpayers case we're looking at it you know in the future she's probably not never gonna amass this amount of tax again it's probably not going to harm if we could do first time I Bateman why not right we did go ahead up and get a first-time abatement for 2022 because remember 12 11 and 10 are all clear so even if you have a case where it's mixed like that you have multiple years of issue 2022 was still eligible I ended up reducing it $9,000 with one phone call just because of asking for it and that included the interest on the penalty too by the way because penalty went down and the.

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