- 8 -
consideration for abatement of the penalty, the tax-
payer, prior to the tax year in question, had a good
record of timely filing and paying his tax liabilities,
and the underpayment in this case was not due to bad
faith. In addition, the taxpayer exercised prudence by
engaging a CPA to advise him on his personal and busi-
ness tax matters. The taxpayer relied on the advice of
his former CPA, who gave assurance that application of
subsequent taxable years’ tax overpayments to the
taxpayer’s 1999 underpayment would result in elimina-
tion of his tax liability for 1999. While this advice
was clearly erroneous, the taxpayer had no way of
knowing this fact and was in no condition to challenge
this advice. Had the taxpayer been correctly advised
by his CPA, he would have taken the correct action, and
request that this be considered in your review of the
application of the failure to pay penalty.
We are also asking for reduction of interest and/or
abatement in this case based upon consideration of the
following facts.
The majority of the payments made in this case were by
way of payroll deductions from the taxpayer and were
not applied to the tax in some cases until some sixteen
months after the government received the money. For
example, monies deducted from the taxpayers’ January
2000 paychecks were not applied to the taxes due until
Apr 15, 2001 when the taxes for 2000 were due. Apply-
ing 1/12 of the refund due for tax year 2000 evenly
throughout 2000 as payments against the taxes due would
significantly reduce the interest charge in this case
and more fairly represent the actual amount that should
be owed.
In addition interest in this case is eligible for
abatement because the delayed payments were not due
solely to the actions of the taxpayer, but were caused
by erroneous advice from a former CPA. [Reproduced
literally.]
On March 8, 2005, the Appeals officer held another tele-
phonic hearing with petitioner’s authorized representative with
respect to the issues that that representative had raised in
petitioner’s December 30, 2004 letter.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011