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Member
Group: Forum Members
Last Login: 10/3/2006 9:51:36 AM
Posts: 3,
Visits: 3
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| I discovered today that the second extension due July 17th was missed for a CRUT that I am now completing. Our due date system was not used properly to exclude CRUTs (1041-A) from the automatic 6 month extension for trusts (1041) this year. Does anyone have a similar experience, and if so, is there any advice you can offer as to how best deal with a potential penalty for failure to file by the extended due date? Thank you.
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You need to get theses returns filed as soon as possible. The IRS wont assess any penalties on the 5227, but they will on the 1041-A.
The penalty is $10 a day up to a maximum of $5,000. They also calculate the penalty to when they receive the return, and not when it was postmarked.
We prepared a timely return that a client sat on and didn't mail. Sure enough we got a penalty notice in the mail. Do to her age and physical condition we were able to have the penalty waived.
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Sorry I had to fix a couple of typos.
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Power Member
Group: Forum Members
Last Login: 3/12/2011 12:58:57 PM
Posts: 147,
Visits: 823
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| I may need the same information. My client called last week to say that he had misplaced the envelope received in June with the CRT retruns in it and what should he do. I told him to mail them as soon as possible. I had a new client a few years ago who was unhappy with her previous CPA. She had established a CRT a number of years previously with the help of her EA tax preparer. He sold his practice to another EA, the first year after the sale the previous EA did the return. After that the new EA prepared 1041s for the trust instead of 5227s and 1041As, the client discovered it when she found the CRT income on both her 1041 and on the 1041 - double taxation of the worst sort. The charity recommended the other CPA firm. They filed first and second extensions for the CRT and then sent her a letter on October 15 saying they didn't have enough information to complete the returns. I won't speculate as to who was at fault but she received some nasty letters from IRS about not filing the return. Meanwhile, I prepared the return in January (due the previous Oct 15) and answered the letters to the IRS - where they were asking for $$ per day in penalties - to say that she had received the letter saying they weren't doing the return and she found someone else and the returns were prepared and sent in late. The IRS waived the penalties to my surprise. It did take 1 letter from her and 2 from me to accomplish the penalty waiver, but it's possible. Good luck!
Mary Kay Foss
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