How to request abatement of penalty for late 1120S filing? S-corp relief options?

You definitely have options here! The IRS offers what's called "First-Time Penalty Abatement" for situations exactly like yours, especially since you have a clean compliance history (assuming you've filed and paid on time for the past 3 years). For inactive S-corps with zero activity, the IRS tends to be more understanding when there's an honest mistake. To request abatement, you'll need to write a letter referencing the notice number, explaining the reasonable cause (your confusion about deadlines for an inactive business), and explicitly requesting "First-Time Penalty Abatement" for the failure-to-file penalty. Include a statement that the business has been inactive since 2019, that you filed a zero-activity return, and that you misunderstood the S-corp filing deadline. Be sure to include copies of the notice and mail it to the address on the notice.

After struggling with almost the exact same situation (missed S-corp deadline for my inactive business), I tried for weeks to get through to the IRS with no luck. Then I found this service called taxr.ai at https://taxr.ai that helped analyze my penalty notice and drafted a perfect abatement request letter. They have this tool specifically for handling penalty abatements that broke down exactly what I needed to say and how to format it. Their system actually looked at the penalty notice details and told me exactly what reasonable cause arguments would be most likely to succeed based on my circumstances. The whole process took me like 15 minutes and saved me hours of research and stress.

I have to admit I was skeptical about taxr.ai when I first posted, but I decided to try it since my penalty was over $1500. The service actually delivered exactly what I needed - a customized abatement letter that directly addressed my specific situation with an inactive S-corp. The IRS just approved my abatement request yesterday! The letter taxr.ai helped me create cited specific Internal Revenue Manual sections about reasonable cause that I never would have known about. The whole process took about 8 weeks from submission to approval. Definitely saved me the full penalty amount for about 15 minutes of work.

If you're having trouble getting through to the IRS about your penalty (which I definitely did with my S-corp penalty), check out https://claimyr.com. I spent DAYS trying to reach someone at the IRS about my penalty abatement, but their phone system kept disconnecting me after being on hold for hours. Claimyr basically waits on hold with the IRS for you and calls you when they actually get a human on the line. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c For my 1120S penalty situation, I needed to speak directly with someone in the business division, and it would have taken me weeks of trying on my own. The service saved me literally days of frustration, and the IRS agent I finally spoke with was actually super helpful once I explained the situation.

I need to eat my words from my previous comment. After another week of failing to get through to anyone at the IRS about my own penalty issue (not exactly like yours, but similar), I broke down and tried Claimyr. Within 3 hours I was talking to an actual IRS representative who helped me start the abatement process. I was absolutely convinced it wouldn't work or would be some kind of scam, but it was legitimate. I didn't have to provide any sensitive information to the service - they just handled the hold time and connected me when they reached a person. The IRS agent I spoke with went through my whole case with me and helped me understand exactly what documentation I needed to submit. Already sent in my request letter.

Just wanted to add my experience - I got a similar penalty for late S-corp filing but for 2021. I wrote a detailed penalty abatement letter explaining that we'd had turnover in our accounting department and the deadline was missed during the transition. Don't forget to include the statement "We have a history of compliance and are requesting First Time Abatement under Internal Revenue Manual 20.1.1.3.3.2.1." The IRS approved it in about 6 weeks and removed the entire penalty. Just be sincere, to the point, and reference your previous good compliance history if applicable. It really does work!

Has anyone actually tried filing Form 843 for this? The IRS website says that's the official form for requesting abatement of penalties. I'm dealing with the same issue and wondering if a letter or the actual form is better.

I went through this exact same situation last year with my S-corp - missed the March 15th deadline thinking it was April 15th like everything else. The frustration is real, especially when it's a completely inactive business! I successfully got my $1,670 penalty completely abated by writing a straightforward letter explaining the reasonable cause. Key points I included: 1) The business has been inactive since 2019 with zero income/activity, 2) I confused the S-corp deadline with individual tax deadlines, 3) I requested "First Time Penalty Abatement" and cited my clean compliance history, 4) I emphasized there was no tax impact to the Treasury since it was a zero-dollar return. The IRS approved it in about 5 weeks. Don't let anyone tell you it's hopeless - they're actually pretty reasonable about honest mistakes, especially for inactive businesses. Just be clear, concise, and include a copy of the penalty notice with your letter. You've got this!

I just went through this exact same penalty situation with my S-corp last month! Got hit with the $1,670 penalty for missing the March 15th deadline on what was essentially a zero-activity return. Here's what worked for me: I called the IRS business line (not the general number) at 800-829-4933 and spoke directly with someone in the business tax division. The agent was actually very helpful and walked me through the penalty abatement process over the phone. She explained that for inactive S-corps with zero income, they often approve reasonable cause abatements, especially if you have a clean filing history. The key phrase to use is "reasonable cause" - explain that you confused the S-corp deadline with individual tax deadlines, emphasize that the business has been inactive with no income or tax impact, and mention your history of timely filing (if applicable). The agent started the abatement process right there on the call and told me to expect a response in 4-6 weeks. I'd recommend calling that business line first before writing letters - sometimes they can resolve it immediately, and it's much faster than the mail process. Good luck!

I'm dealing with a very similar situation right now - inactive S-corp since 2018, filed our zero-activity 1120S about a month late because I also got confused about the March 15th vs April 15th deadlines. Just received my penalty notice yesterday and honestly had a mini panic attack seeing that $1,670 amount! Reading through everyone's experiences here is giving me so much hope. It sounds like the IRS is actually pretty reasonable about these situations when you explain the circumstances properly. I'm planning to try both approaches - call the business line that @Zoe mentioned (800-829-4933) first to see if they can handle it immediately, and then follow up with a written request if needed. One thing I'm curious about - for those who successfully got their penalties abated, did having an inactive business status make a difference in the IRS's decision? It seems like emphasizing the zero tax impact and inactive status might be important factors they consider. Thanks everyone for sharing your experiences - this community is incredibly helpful for navigating these stressful situations!

I've been reading through all these experiences and they're incredibly reassuring! I'm in a nearly identical situation - S-corp that's been dormant since 2020, filed our $0 return thinking the April 15th deadline applied, and just got slapped with the same $1,670 penalty. What's really encouraging is seeing how many people have successfully gotten these penalties abated, especially for inactive businesses. It seems like the combination of reasonable cause (deadline confusion), zero tax impact to the Treasury, and clean compliance history creates a strong case. I'm planning to follow the advice here and call that business line (800-829-4933) first, then send a written follow-up if needed. For anyone else in this boat, it's reassuring to know that the IRS seems to understand these are honest mistakes, especially when there's no actual tax revenue involved. Thanks to everyone who shared their success stories - it's transformed this from feeling like a hopeless situation to something very manageable!

I just want to add another success story to hopefully help others in similar situations. I dealt with this exact same penalty last year - $1,670 for filing my inactive S-corp's 1120S about 3 weeks late because I thought the deadline was April 15th. After reading advice similar to what's been shared here, I called the IRS business line at 800-829-4933. The representative was surprisingly understanding and helpful. I explained that my S-corp had been completely inactive since 2019, that I confused the filing deadlines, and that the return showed zero income/activity. She immediately started the penalty abatement process over the phone and told me it qualified for "reasonable cause" relief. The whole call took about 20 minutes (including hold time), and I received a letter about 5 weeks later confirming the penalty was fully abated. The key points that seemed to matter most: 1) honest mistake about deadlines, 2) inactive business with no tax impact, 3) clean compliance history, and 4) the fact that I did actually file the return (just late). Don't let anyone tell you these penalties are impossible to get removed - the IRS is actually quite reasonable about genuine mistakes, especially for inactive businesses. Just be honest, professional, and emphasize the zero tax impact. You've got a very good chance of success!

I'm going through this exact same nightmare right now! Just got my penalty notice yesterday for $1,670 because I filed my inactive S-corp's 1120S in April instead of March. Like you, I had zero business activity to report but still got hammered with this massive penalty for a simple date mixup. Reading through everyone's success stories here is giving me so much hope though. It sounds like the IRS is actually pretty understanding about these situations, especially when you can show it was an honest mistake for an inactive business with zero tax impact. The fact that so many people have gotten these penalties completely abated is really encouraging. I'm planning to call that business line (800-829-4933) that several people mentioned first thing Monday morning. From what I'm seeing, emphasizing the reasonable cause (deadline confusion), inactive business status, and clean compliance history seems to be the winning combination. Thanks to everyone who shared their experiences - you've turned what felt like a hopeless situation into something very manageable. Will definitely update this thread with my results to help others in the same boat!

I'm dealing with almost the exact same situation right now - S-corp inactive since 2020, filed the zero-activity 1120S in April thinking it was due with personal taxes, and just received the dreaded $1,670 penalty notice. The panic is real! What's incredibly reassuring is seeing how many people in this thread have successfully gotten these penalties completely abated. It seems like the IRS genuinely recognizes that confusing S-corp deadlines with individual tax deadlines is a common, understandable mistake - especially for inactive businesses with zero tax impact. Based on all the advice here, I'm planning to call the business line at 800-829-4933 first to see if they can resolve it over the phone, then follow up with a written request if needed. The key points everyone mentioned - reasonable cause (deadline confusion), inactive business status, zero tax impact, and clean compliance history - seem to create a strong case for penalty abatement. Thanks to everyone who shared their success stories! You've transformed what felt like a financial disaster into a very manageable situation. I'll definitely update this thread with my results to help others facing the same issue.

I went through this exact situation with my S-corp last year and completely understand the panic you're feeling right now! That $1,670 penalty for what amounts to a calendar mix-up feels absolutely crushing, especially for a business with zero activity. Here's what worked for me: I wrote a concise but detailed letter explaining the reasonable cause - specifically that I confused the S-corp March 15th deadline with individual tax deadlines since the business had been completely inactive. I made sure to emphasize three key points: 1) the business has had zero income/activity since it went dormant, 2) there was no tax impact to the Treasury, and 3) I have a clean compliance history and was requesting First Time Penalty Abatement. The IRS approved my request in about 6 weeks and removed the entire penalty. What really seemed to matter was being honest about the mistake while showing that this was a genuine error for an inactive business, not tax avoidance. Don't lose hope - the IRS is actually quite reasonable about these situations when you can demonstrate reasonable cause. The fact that your business is truly inactive with zero dollars at stake works strongly in your favor. You've got this!

I went through this exact same situation with my S-corp about 6 months ago - dormant since 2018, filed the zero-activity 1120S in April instead of March, and got hit with that same $1,670 penalty that makes your stomach drop. After reading through all the advice here, I decided to try both approaches: called the business line at 800-829-4933 first, then followed up with a written request. The phone call was surprisingly productive - the representative was knowledgeable and understanding about deadline confusion for inactive businesses. She started the penalty abatement process immediately and explained that cases like mine with zero tax impact are typically approved under reasonable cause relief. I also sent a follow-up letter to the address on my penalty notice, specifically mentioning "First Time Penalty Abatement" and emphasizing that my business had been completely inactive with no income or tax revenue impact to the Treasury. The combination approach seemed to work well - I received full penalty abatement confirmation about 7 weeks later. The key insight from my experience is that the IRS really does understand these are honest mistakes, especially when there's no actual tax avoidance involved. For inactive S-corps, the deadline confusion is incredibly common and they handle these cases routinely. Don't let the penalty amount scare you - with your circumstances (inactive business, zero activity, clean history), you have an excellent chance of success!