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Accountant Asks Treasury to Authorize Penalty Abatement

OCT. 29, 1997

Accountant Asks Treasury to Authorize Penalty Abatement

DATED OCT. 29, 1997
DOCUMENT ATTRIBUTES
  • Authors
    Gunteski, R. Joseph
  • Institutional Authors
    Cowan, Gunteski & Co.
  • Code Sections
  • Subject Area/Tax Topics
  • Index Terms
    abatements
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 97-31484 (4 pages)
  • Tax Analysts Electronic Citation
    97 TNT 224-39
====== SUMMARY ======

R. Joseph Gunteski of Cowan, Gunteski & Co., Toms River, N.J., has asked Treasury to authorize a penalty abatement for one of his firm's clients. According to Gunteski, his firm followed an IRS representative's advice when it filed a Form 8752 on the client's behalf. As a result of taking that advice, he says, the client was assessed almost $5,000 in penalties. Although numerous revenue agents in the IRS's local offices and Problem Resolution office believe the penalties should be abated, Gunteski says, no one believes the Service has the authority to do it. For that reason, he would like Treasury to authorize the abatement.

====== FULL TEXT ======

October 29, 1997

Office of the Assistant Secretary for Tax Policy

 

1500 Pennsylvania Ave.

 

Room 4040MT

 

Washington, D.C. 20005

VIA: Certified Mail/Return Receipt Requested

RE:

Dear Sir or Madam:

[1] We are the CPA firm that represents the above referenced client. We have tried for literally years, through all different agencies of the IRS, to resolve our client's tax problem. Enclosed is a letter dated February 19, 1997 to the Problems Resolution Branch of the IRS, summarizing the issues. We have recently been informed by a representative of the Problems Resolution office that although it appears as if we have excellent cause for abatement there is nothing they can do about it. They gave me your office and indicated that you may help us resolve this matter in a manner that is reasonable, fair and equitable to the taxpayer.

[2] In short, we filed Form 8752 in accordance with what was told to us by an IRS representative. We followed their direction and subsequently have been assessed almost $5,000 in penalties. Our client has historically always filed and paid 100% of his taxes on a timely basis. This information is obviously documented and can be supported by the IRS. There was never any intention to avoid or evade payment. We simply followed IRS directions and are now being penalized for doing so.

[3] We have discussed this matter with numerous revenue agents from the local office all the way up through the Problems Resolution office. We have been repeatedly told by the IRS representatives that the abatement we are requesting appears to be reasonable and that they would grant it if they could, however, they did not have the authority to do so. We are now pleading for your help with this matter as it appears that your office may be the only one that would be able to grant the relief that the taxpayer deserves.

[4] I would greatly appreciate your assistance in resolving this matter fairly. Please call me with any questions you may have.

[5] Again, I thank you for your cooperation.

Very truly yours,

R. Joseph Gunteski

 

Certified Public Accountant

 

Cowan, Gunteski & Co., P.A.

 

Toms River, New Jersey

Enclosure

* * *

February 19, 1997

ATTN: Business Tax Abatement Section

 

Internal Revenue Service

 

Holtsville, NY 00501

VIA: Certified Mail Return Receipt Requested No.

RE:

Dear Sir or Madam:

[6] We are the Accountants for the above referenced Corporation and have an executed Power of Attorney on file with you.

[7] The purpose of this letter is to respectfully request full abatements of penalty and interest assessments with respect to Form 8752. As of December 13, 1996, the interest assessed was $2,597.98 and the penalty assessed was $2,200.40. The grand total of requested abatements as of December 13, 1996 totals $4,798.38.

[8] The 1993 Form 8752 reflected a balance due in the amount of $22,004. The 1994 Form 8752 reflected a refund of $22,161. The net result of these two returns indicated a refund of $157. We were advised by several Internal Revenue representatives that we can file BOTH RETURNS TOGETHER with the I.R.S. which is what we did. The result should have been no tax due and a refund of $157. We were also advised by these I.R.S. representatives that there would be NO penalty or interest assessments charged to the Corporation in this matter by filing both Forms 8752 together for two years. After months of conversations with the I.R.S., my client was assessed the above referenced interest and penalty assessments in error. We followed the guidance of numerous I.R.S. representatives in GOOD FAITH that this tax would be paid in full based on the procedures we followed WITHOUT any penalty and interest assessments.

[9] Under the I.R.C. Section 6404(e) under the "Taxpayer Bill of Rights", we strongly feel that the interest assessment was due to an error caused by employees of the I.R.S. in performing a "MINISTERIAL" Act.

[10] We are of the opinion that this ministerial error was procedural in nature and qualifies as a ministerial act. Since we were advised by numerous I.R.S. representatives that filing both returns together showing offsetting amounts resulting in a $157 refund would close this matter WITHOUT any penalty or interest assessments. Clearly, we were misinformed based upon a procedural error and the Corporation should not be assessed any interest and or penalty charges. If we were not misinformed by various I.R.S. representatives originally, we would have filed the original return with the $22,004 payment and we would have received a $22,161 refund after filing the second Form 8752 resulting in a net refund of $157.

[11] In summary we strongly feel that the Corporation should not be assessed any interest and or penalty assessments since we acted in good faith based upon I.R.S. representations explained above. The Corporation should NOT BE assessed $4,798.38 in interest and penalty assessments based upon an error which we consider to be a procedural (ministerial) act.

[12] Please be advised that if we do not receive a full abatement of all penalties and interest assessments, we will pursue the administrative remedy of the Taxpayer's Advocate which will assist us in getting positive action on behalf of the Corporation due to a CLEAR hardship as a result of the manner in which the I.R.S. administered this situation through a procedural error.

[13] If you require any additional information or have any questions, please call me at 1-908-349-6880.

Respectfully Submitted,

R. Joseph Gunteski

 

Certified Public Accountant

 

Cowan, Gunteski & Co., P.A.

 

Toms River, New Jersey

Enclosures

DOCUMENT ATTRIBUTES
  • Authors
    Gunteski, R. Joseph
  • Institutional Authors
    Cowan, Gunteski & Co.
  • Code Sections
  • Subject Area/Tax Topics
  • Index Terms
    abatements
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 97-31484 (4 pages)
  • Tax Analysts Electronic Citation
    97 TNT 224-39
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