Video instructions and help with filling out and completing Which Form 843 Basics

Instructions and Help about Which Form 843 Basics

So then we go okay what happens though if we don't have that perfect fact pattern and then we know they don't qualify maybe they've had more than one year I get this question sometimes somebody didn't file for more than one year well we know that that one of those years is just not gonna be qualified for a first-time of eight because they don't have those prior years clean they have penalties okay what's our plan be reasonable cost considerations becomes in essence our plan B if they aren't in that narrow you know rule set that we know they can qualify for first-time abatement well then we have to do other means reasonable cost considerations is the other method this is really where we're arguing a best excuse so it really literally is a good excuse reasonable cause arguments they don't exist in the Internal Revenue Code they really only exist in the Internal Revenue manual and that I want to stress on because it's not like we have law on our side to say you must give this back to the client no we're really going to them and saying please consider what happened to them this is their circumstances this is what we're doing in this case is going and kind of begging for mercy we don't have any law precedent so know that that's where it lives and it's helpful to know that because then we know we're worth where we're standing there but this is our good excuse we're giving them the reason that things were just not that they did it on purpose really we can request these by phone but the air our dollar thresholds it makes a little more complex and it's that rabbit trail that is a little tougher to get through is we're going into the rabbit hole if we answer a question this way that it takes us to a different questions and so forth so it makes it a little difficult but you can write it in as well and also the dollar thresholds we really don't know what those are those are redacted there's stricken from the Internal Revenue manual we don't know what those limits are so if our phone and request exceeds those limits then you can still send in a written request but they really can't tell us what those limits are they're going to use the RCA software definitely this is what the ERC software was built for but here's the next section we entity there's a lot of different types of reasonable cause so why not since we know everything is built this way and it runs through the software craft our excuse along those lines if we reference it whenever possible and say this is you know the category of reasonable cause that I believe that the client or the taxpayer falls under that's gonna help this process a little bit so it's important to know what those categories are so what are the main categories if we look in the Internal Revenue manual we have some main ones the overriding one is ordinary business care and prudence so we're going to detail on that in just a moment death serious illness or unavoidable absence a fire casualty or natural disaster so these are kind of just like main headings it's like taking a box off the shelf and saying here I'm going to stuff my clients excuse in this box and maybe have a little spill over and there's some other good excuse that also goes in this other box so we got to see which which of all these different causes may apply being unable to obtain records or if they're subject to a mistake that was made relied on bad advice and especially if it happens to be written or oral advice from the IRS they're gonna take that pretty serious being ignorant of the law these are all possible reasonable causes so going into the main overriding thought ordinary business care and prudence and I've referenced each one of these Internal Revenue manual sections for you because if you're writing in especially definitely reference each of these and say okay here's the the fact pattern the facts and circumstances but you know here's why I think it falls within this reasonable cause provision so what is ordinary business care and prudence basically if you have nothing else that fits into the other ones that I'm going to tell you in a moment this is the one it has to qualify for so if somebody makes a provision to meet their obligation whenever reasonably foreseeable events occur they're doing their job of trying to you know meet their obligation they're exercising what's called ordinary business care and prudence but the facts and circumstances drive everything when it comes to looking for any penalty but bateman in this regard so they have to establish that they exercise a degree of care that any other reasonably prudent person would but because of the facts that's because of the circumstances of what happened to them they just were unable to comply with the law so what are they going to look at they're gonna consider things like what is this reason why couldn't they comply to with you know filing or paying on time what is their compliance history like so here's one of the reasons I especially would go back further in time maybe you want to see that this is a great compliant taxpayer they've been compliant for 20 years and last year for some reason they just you know they fell off the rails and things went sideways because of an event in their life awesome that's gonna be a really great one to argue however I have one that's maybe 20 years of being out of compliance and that's gonna be really hard for me to argue so they're gonna look at that compliance