First Time Penalty Abatement - But not credentialed as CPA or EA


#1

Hello

I do not have CPA license nor am I an Enrolled Agent, so I’m working with someone who would like to use his FTA, Since I don’t have POA on file, would I just mail the letter in and have the taxpayer use his personal information as if he’s the person requesting his own waiver?


#2

Good Morning Pamela,
Your thought process is pretty accurate. As there is a lack of licensing (unless your a family member), you should have the TP use his personal information as if he’s the person requesting the waiver. If they have the time, many FTA’s can be completed over the phone (as long as they meet the criteria). If you have a Canopy Tax Resolution license, we have a letter and phone template that can be used (would just need to change a few words like client, poa, etc).

Hope this helps,
Jeff


#3

What types of penalties are subject to the first time abatement? Substantial underpayment? I have a prospective new client who had a $46,000 non cash charitable contribution on their tax return. Upon questioning the prospective client they said this was an error by the preparer and this was someone else’s contribution. I told the prospective client they needed to do an amended return and would probably incur a substantial underpayment penalty (there tax liability would have been understated by more than 100%) along with other penalties and interest. Comments anyone?


#4

Good Morning Tim,
I would recommend taking a look at the Internal Revenue Manual (IRM) 20.1.5 “return related penalties”.

https://www.irs.gov/irm/part20

Jeff


#5

I was able to get it abated :slight_smile: Thank you


#6

Where can I find the letter and phone templates?


#7

Leigh-
Using the Canopy Resolution software, you can find response letters under the analytics (Templates mid way down the page):

-Jeff


#8

Hi Jeff,

I am an EA and a new customer with CANOPY. I am looking forward to your assistance in the area of tax resolution. What’s your email address ? Also, what is FTA ?

Best regards.


#9

Hey Julian,
Best way to reach me is through this community or jeffrey.mcneal@canopytax.com

The FTA is just the abbreviation for First Time Abatement. You may want to consider reading this article about strategic ways to use the FTA. I REALLY like the author :wink:

Hope this helps,
Jeff


#10

Julian,
Part II. I found this internal e-book here at Canopy. I THINK you should be able to access via the link (but not sure if it is gated material):

Jeff