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We expect to perform the following services:


  • Prepare form 2848 Power of Attorney and have you sign
  • Discuss your tax penalty with the Internal Revenue Service (IRS)
  • Prepare a detailed response to the IRS asking for Penalty removal for a cause
  • Perform a limited amount of bookkeeping and analysis necessary for preparation of the IRS reply.
  • Correspond with the IRS’s collection department, service center and appeal unit.

Our work in connection with the above tasks does not include procedures to discover defalcations or other irregularities or to perform any legal work or represent you in any litigation.

We will use our judgment in resolving questions where the tax law is unclear, or where there may be conflicts between the taxing authorities’ interpretations of the law and other supportable positions. Unless you instruct us otherwise we will apply the “realistic possibility of success” standard to resolve such issues in your favor where possible. The law includes penalties that may be imposed when taxpayers understate their tax liability. If you would like information about those penalties, please call this office.

Management is responsible for proper recording of transactions in the accounts, safeguarding of assets, and substantial accuracy of the financial records. Because you have final responsibility for the returns, you should review them carefully before you sign and file them, and send tax reporting information to the shareholders.

Which Penalties
can be removed?

A penalty of $25,000 will be assessed on any reporting corporation that fails to file Form 5472 when due and in the manner prescribed. The penalty also applies for failure to maintain records as required by Regulations section 1.6038A-3.


Each member of a group of corporations filing a consolidated information return is a separate reporting corporation subject to a separate $25,000 penalty and each member is jointly and severally liable.

If the failure continues for more than 90 days after notification by the IRS, an additional penalty of $25,000 will apply. This penalty applies with respect to each related party for which a failure occurs for each 30-day period (or part of a 30-day period) during which the failure continues after the 90-day period ends.


Do you qualify
for penalty removal?

Almost anyone can apply.

The IRS has a special program in place to request relief for penalties. This program is open for anyone who can show a "Reasonable Cause" (a good excuse why you didn't file on time) or it is your first time - not filing on time.


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