Abatement of Penalty That is Already in Collections

Technical topics regarding tax preparation.
#1
Dbertke  
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10-Oct-2019 2:18pm
Location:
Ohio
The situation I am running into is this. I have a partnership client in which one of the partners bought out the other in September 2020. This led to the partnership being terminated in September. I was not aware of this until the taxpayer brought in their tax information in February 2021. As a result, the return was technically filed late. I made the partners aware that they might be receiving a tax notice for this and to let us know if they do.

Client recently brought me in a notice showing that there was an overdue tax account for the partnership that was now being sent to collections. After asking them to take a look, they brought in an original notice dated in March assessing the late filing penalties.

My plan was to request an abatement of this penalty either under Rev Proc 84-35 or the First Time Abatement Waiver. Is it possible to do this with the account in collections? If so, would I follow the normal procedures to request the abatement?
 

#2
supdat  
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619
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25-Apr-2014 2:11pm
Location:
New York
I recently filed Form 9423, Collection Appeal Request, together with a previously submitted request for abatement of a penalty (not FTA). They came back and said that they forwarded the request for abatement to the "appropriate office" for a response. So I guess based on that it may be possible to request a waiver after the account is in collections. But would like to hear others' thoughts.
 

#3
dave829  
Account Deactivated
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California
It should make no difference that the account is in collections. IRM 20.1.1.1.3 provides that all employees are required to follow the penalty relief policies servicewide.
 

#4
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2656
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28-Apr-2021 7:00am
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FL
It's never made a difference in my practice.
Steve
 


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