I was young and naive. I hadn't filed my 2013 corporation return (S status), and only had incorporated on Dec 16 of that year. I hadn't even begun operations.

Then I discovered annual corporate tax filings were compulsory during the 2014 filing season. I had quite a penalty. Can I challenge / deduct the penalty payment from my 2015 taxes?

  • Please indicate what country you are in for tax questions. – JohnFx Dec 17 '15 at 23:02
  • I added the US tag since the "S status" seems exclusive to the US. If that's wrong, please correct it. @BrickForSheep – user32479 Dec 18 '15 at 0:11
  • Thanks! And also, IRS would indicate US, no? – BrickForSheep Dec 18 '15 at 23:07

You can most definitely challenge, however from your description it sounds like the penalty was assessed correctly.

Generally, in this situation and assuming you're otherwise compliant, you can ask to wave the penalties.

There's more information here on how to proceed.

Re deducting the penalties - no. As JohnFx said, the general rule is that you can not deduct penalties or fines. Not even a parking ticket on a business trip.

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I'm assuming you are in the USA, if so...

According to IRS Publication 535

Penalties. Penalties on underpaid deficiencies and underpaid estimated tax are not interest. You cannot deduct them. Generally, you cannot deduct any fines or penalties.

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