$10k in late S Corp Filing Penalties for 4 years - can I fight these?

S Corp penalties can be brutal, but you do have some options! The IRS offers a First Time Penalty Abatement (FTA) that might help with at least one of those years. For FTA to apply, you need to have had no penalties for the three years prior to the first year you're requesting abatement for. Even if you don't qualify for FTA, you can still request penalty relief based on reasonable cause. The IRS considers factors like serious illness, death in family, natural disasters, inability to obtain records, or bad advice from a tax professional. You'll need to write a detailed letter explaining your situation and providing any supporting documentation. For the years that went to collections, you'll need to work with the collection agency, but you can still request penalty abatement from the IRS directly. Don't give up without trying! Many people successfully get these penalties reduced or eliminated.

After dealing with similar S Corp penalties, I found this AI tool called taxr.ai that saved me thousands. I was in a similar situation with about $12k in penalties across multiple years and feeling completely hopeless. I spent hours researching options online and got conflicting advice everywhere. Then I stumbled across https://taxr.ai and uploaded my penalty notices. Their system analyzed my specific situation and generated a customized penalty abatement letter citing exact IRS procedural rules that applied to my case. It identified potential reasonable cause arguments that I never would've known about. Long story short, I got about 75% of my penalties abated! The tool walks you through everything step by step and explains which strategies have the highest success rate for your specific situation.

Just wanted to update after trying taxr.ai from the comment above. I was super skeptical at first, but holy crap it actually worked! I uploaded my penalty notices, answered some questions about my situation, and the system generated this super detailed letter with all these specific IRS procedural references. It even highlighted something I didn't know - that there was a processing delay at the IRS service center that handled S Corps during one of the years I was penalized, which qualified as reasonable cause! I submitted the letter they generated and got two of my four years completely abated, which saved me over $5k! The collections agency actually put a hold on my account while the abatement request is being processed for the other years. Feeling hopeful for the first time in months!

I went through something similar last year and literally couldn't get anyone at the IRS to talk to me about options. I'd be on hold for 2+ hours and then get disconnected. After like 8 attempts, I found this service called Claimyr which is basically a way to skip the IRS phone queue. I was super skeptical, but I went to https://claimyr.com and they somehow managed to get me connected to a real IRS agent in less than 20 minutes. They have this whole system that monitors IRS wait times and calls for you, then connects you when an agent picks up. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with walked me through the abatement request process and even gave me specific language to use in my letter based on my situation. Definitely worth it when you're dealing with penalties this big.

I need to eat my words from my previous comment. I was desperate enough to try Claimyr after my third attempt waiting 2+ hours and getting disconnected by the IRS. It actually worked exactly as advertised. I got a call back when an agent was on the line, and I was able to discuss my S Corp penalties with someone who actually knew what they were talking about. The IRS agent confirmed I qualified for first-time abatement for one year (2019), and gave me specific instructions for submitting a reasonable cause request for the other years. They even told me which IRS procedural memo to reference for pandemic-related relief that might apply to my 2020 filing. I'm still in the process of getting everything resolved, but just being able to talk to an actual human at the IRS who could answer my questions was worth it. Completely changed my approach to fighting these penalties.

I fought S Corp penalties a few years ago and won most of them. Here's what worked for me: For the FTA (First Time Abatement), you're right that it only works for one tax year, typically the earliest one. But for reasonable cause, there are some arguments that work better than others for S Corps specifically. I argued business hardship + lack of knowledge of filing requirements as a new S Corp owner for one year, and death in the family + natural disaster (there was a flood in my area) for another year. The key is to be VERY specific in your letter and provide any documentation you can. Don't just say "I didn't know" - explain exactly why and how your circumstances prevented timely filing.

Has anyone tried the Reasonable Cause Assistant on the IRS website? I just discovered it exists but wondering if it's actually helpful for S Corp penalties or mostly for individual tax stuff.

I'm dealing with a similar situation right now - about $8k in S Corp penalties across three years. After reading through all these responses, I'm feeling more hopeful that there might be options. One thing I wanted to add is that you should definitely request your penalty computation worksheets from the IRS before you submit any abatement requests. Sometimes there are calculation errors or the penalties weren't applied correctly in the first place. I've heard of people getting significant reductions just by having the IRS recalculate properly. Also, for anyone considering the AI tools mentioned here - make sure you understand exactly what you're getting. While they might help generate letters, you still need to understand your specific situation and provide accurate information. The IRS will want supporting documentation for any claims you make. Has anyone tried working directly with the Taxpayer Advocate Service for these types of penalty issues? I'm wondering if that's worth exploring before going the paid service route.

I went through almost the exact same situation two years ago - $9k in S Corp penalties across multiple years with two already in collections. It felt completely overwhelming at first, but I was able to get about 70% of the penalties abated. Here's what actually worked for me: I started by requesting my account transcripts and penalty computation worksheets to make sure everything was calculated correctly (found one error that saved me $800 right there). Then I submitted a combination approach - FTA for the earliest eligible year and reasonable cause letters for the others. For reasonable cause, I focused on specific events that prevented timely filing rather than general business struggles. In my case, I had a key employee leave unexpectedly who handled all the tax prep, plus some health issues that year. The key was providing detailed documentation and being very specific about how these events directly prevented me from meeting the filing deadline. The collections cases were trickier but not impossible. I had to work with both the IRS and the collection agency, but once the IRS approved the abatement, the collections were resolved too. Don't give up! These penalties seem insurmountable but there are definitely options. Start with getting your account transcripts and penalty worksheets, then build your case from there.

I've been following this thread closely since I'm dealing with similar S Corp penalty issues ($7k across three years). The variety of approaches and success stories here are really encouraging! One thing I wanted to add based on my research is that the IRS has specific procedures for S Corp penalty abatement that are different from individual tax penalties. There's actually an internal memo (IRM 20.1.5.16) that gives IRS agents guidance on when to approve reasonable cause for business penalties, and it's more flexible than most people realize. Also, for anyone considering the various services mentioned here, I'd recommend starting with the free options first. The Taxpayer Advocate Service really can be helpful for cases involving multiple years and significant financial impact. I submitted a TAS case last month and got assigned an advocate who's been super responsive and knowledgeable about S Corp penalties specifically. The key thing I've learned is that the IRS actually wants to work with taxpayers who are making good faith efforts to resolve these issues. They'd rather get some payment and compliance than deal with prolonged collection efforts. The trick is knowing how to present your case in a way that fits their guidelines. Has anyone here had experience with installment agreements while penalty abatement requests are being processed? That might be another angle to explore for managing the financial pressure while fighting the penalties.