Question:
I thought I had made all my payroll tax payments on time. How I have find out I was $197.00. Da*n, the pentaly and interest is over twice the short payment. Is there any way to convince the IRS to set aside the pentaly?
Answers:
Unless you were sick at the time you made the deposits and 941 report, you don't have any reasonable excuse. You can still made a plea to the IRS stating that you have made a diligent effort to comply and the error was a clerical error, and that you feel the penalty is not just, especially if the amount that you were short is a very small per cent of the total you paid.
Definitely go ahead and pay the total amount due, otherwise you will addition interest to pay.
You can also contact the Tax Payers Advocate with the same request. You probably have a 10% chance of getting a refund of the penalty. If you have a business that takes a lot of your time, it maybe worth your time to just pay the tax and focus on the business and keeping your deposits accurate.
I wish you the best.
The IRS isn't very forgiving about penalties on money you withheld from your employees but didn't remit to the IRS on a timely basis. Unless you have a very good excuse, your chances are poor - and "I forgot" or "I thought I had..." isn't going to cut it.
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