With the craziness of the tax season and COVID-19, my staff accountant forgot to check the box on a client’s auto debit for FTB tax due (individual) on 7/15/20. We realized this issue on 7/30/20 and paid the tax due at this time.
The FTB is assessing penalties and interest of $4,000. Is there anything that can be done to get this amount waived? I have spoken to the FTB practitioners line as well as the Taxpayer assistance line and no luck.
My tax software requires separate taxpayer signature on bank account information for any electronic payments or refunds, and the cover letter “filing instructions” that are generated will confirm for me exactly what has been selected to happen for payments, so I can double-check and also inform the taxpayer before the deadline.
I doubt it can be waived. Both you and the taxpayers signed off on the following from Form 8879: “If I am filing a balance due return, I understand that if the FTB does not receive full and timely payment of my tax liability, I remain liable for the tax liability and all applicable interest and penalties.”
Isn’t this situation exactly the reason why you carry E&O insurance?