For Nine Quarters, a Corporation Filed Returns and Paid Payroll Taxes Late.

The IRS assessed penalties and interest. The company claimed that it had “reasonable cause” to be late because its owner was injured, it had software problems and an employee handled tax duties. It sought penalty and interest relief.

But the Court of Federal Claims ruled there was no reasonable cause for missing deadlines because 1) the employer’s obligations couldn’t be delegated and 2) although injury to a taxpayer can support a reasonable cause finding, the taxpayer was the corporation, not its owner. The court sustained penalties for six of the quarters and all of the interest. (All Stacked Up Masonry, 10/22/20)