You'll need more than just saying you weren't aware. The IRS wants to see that you took reasonable steps to understand your obligations and that you're making efforts to be compliant going forward. In your statement, include: 1. Specific reasons why you weren't aware (perhaps you consulted with someone who gave incorrect advice, or your business model changed) 2. The timing of when you discovered the requirement 3. Steps you took once you realized you needed to file 4. What procedures you're putting in place to ensure timely filing in the future Be honest but thorough. The IRS is more lenient with foreign entities that make honest efforts to comply once they discover their filing obligations.

This is incredibly helpful! I hadn't heard of the First Time Penalty Abatement program - that sounds like it might be simpler than going through the reasonable cause process. Do you know if FTA can be applied retroactively to penalties that haven't been assessed yet, or do you need to wait until the IRS actually sends you a penalty notice before requesting it? Also, when you mention the "simplified approach," does that mean filing a shorter version of the 1120F or is it a completely different form?

I heard some companies are still filing for those COVID credits retroactively? Is that true or am I too late for that now?

Yes, eligible employers can still claim the Employee Retention Credit retroactively by filing amended payroll tax returns (Form 941-X) for applicable quarters from 2020 and 2021. The statute of limitations gives you three years from the original filing date. However, be extremely careful with this. The IRS has flagged ERC claims as a high-audit area because of widespread abuse. Only claim it if you truly meet all the eligibility requirements about business disruption or revenue decline during the pandemic. Many businesses that started after the pandemic (like OP's) wouldn't qualify at all.

Great point! I'm using QuickBooks Online and I assumed it was categorizing everything correctly, but now I'll definitely check. Is there a specific expense category name I should look for to make sure my employer portions of FICA are being recorded properly?

In QuickBooks Online, you should look for "Payroll Tax Expenses" or "Employer Payroll Taxes" in your chart of accounts. The employer portions of Social Security and Medicare should typically be categorized under something like "Payroll Tax Expense - Social Security" and "Payroll Tax Expense - Medicare" if you have it broken down by type. If you're running payroll through QuickBooks, it should automatically create these entries when you process payroll. But if you're doing payroll manually or through another service, make sure these employer contributions aren't getting lumped in with regular wages or other categories. You want them clearly identified as employer payroll tax expenses so they properly flow to the right line on your Schedule C (or whatever business return you're filing).

Yes, you're right - it's just the Social Security portion (6.2%) for employees. Employers still pay their matching portion, and Medicare taxes continue as normal for everyone. I tried modeling it in TaxAct, but since it's just a deferral and not forgiveness, it didn't show any actual tax savings - just a timing difference of when the tax is paid.

You raise really good points about the timing. I'm new to understanding these tax policies, but it does seem like starting a deferral program in April when the period runs through May is pretty short notice for employers to implement. My company's payroll department told us they're still waiting for official Treasury guidance before making any decisions, which makes sense given the administrative complexity you mentioned. It seems like by the time employers figure out the logistics and update their payroll systems, we might be halfway through May already. As someone who's still learning about tax policy, I'm curious - is this kind of short-term deferral actually helpful for most people, or does it just create more paperwork headaches? The repayment aspect seems particularly concerning if people aren't prepared for it.

This is excellent advice, Diego. I'm new to this community but have been lurking and reading about tax issues. What really struck me about your response is the urgency - I think a lot of people (myself included) would assume this is just poor customer service rather than potential fraud. The 24-hour deadline makes total sense given what others have shared about these scam operations. One question - when you mention requesting the tax transcript from the IRS, is that something you can do online immediately or does it also take time to arrive by mail like the account setup process that Zainab mentioned? If someone is worried about fraud, time seems really critical here. Also, for anyone reading this who might be in a similar situation - are there any other warning signs we should watch for when choosing a tax preparer to avoid this nightmare scenario entirely?

Great questions, Zoey! For tax transcripts, you can get them online immediately if you already have an IRS account set up. If not, you'll need to verify your identity first (which takes 5-10 days by mail as Zainab mentioned). However, you can also call the IRS directly or use services like Claimyr that others mentioned to get transcript information over the phone more quickly. As for warning signs when choosing a preparer: 1) They guarantee unusually large refunds before seeing your documents, 2) They base their fees on a percentage of your refund rather than a flat rate, 3) They won't provide you with a copy of your return, 4) They don't have a Preparer Tax Identification Number (PTIN) displayed, 5) They suggest direct depositing your refund into their account instead of yours, and 6) They operate out of temporary locations or only during tax season. The biggest red flag is any preparer who won't let you review your complete return before filing. Legitimate preparers want you to check everything because they know they're liable if there are errors. If someone is being evasive about showing you what they're filing in your name, that's an immediate deal-breaker.

Dylan, this is such comprehensive advice and I really appreciate how you've connected all the dots from the other community members' experiences. The point about not cashing the refund check is something I hadn't considered but makes total sense - if the refund is based on fraudulent deductions, you'd essentially be borrowing money from the IRS that you'll have to pay back with interest later. I'm also glad you mentioned IRC Section 6107 specifically - having the actual legal code reference makes this feel less like "customer service preference" and more like "this preparer is breaking the law." That's a game-changer when it comes to how seriously to take this situation. One thing that really concerns me after reading all these responses is how common this seems to be. Are there any resources for people to research preparers beforehand? It sounds like there are licensing boards and PTIN numbers to check, but is there a centralized database or website where you can verify a preparer's credentials and complaint history before hiring them? As a newcomer to this community, I'm learning so much about protecting yourself in these situations, but it would be great to know how to avoid them entirely in the first place.

5 Definitely file an amended return! That's a $63k difference in taxable income - you probably overpaid thousands in taxes. You generally have 3 years from the original filing date to amend and get a refund. Form 1040-X isn't that complicated.