To Avoid An IRS Late Filing Penalty Can You Trust Your Accountant’s Advice About When Your Taxes Are Due?

Plaintiff was acting as the executor of an estate when he asked his accountant to apply for an extension of the deadline to file the estate-tax return from the Internal Revenue Service. The accountant told him the deadline had been extended for one year, when, in fact, it had only been extended for six months. When the filing was finally made, it was four months late, and the IRS imposed a late filing penalty of almost $200,000. The taxpayer initiated an action for a refund of the penalty, and the district court granted summary judgment in favor of the government. The Ninth Circuit affirmed, agreeing with the trial judge that the plaintiff had not shown reasonable cause to excuse the penalty.  Knappe v. United States of America  (Ninth Cir.; April 4, 2013) (Case No. 10-56904).