Do I really owe the IRS $1800 in late fees if my accountant didn't file my extension?

The 2010 Jobs Act "significantly increased penalties for non-compliance with information return reporting and it applies to LLCs. I would have to recompute the late filing fee to detemine if the amount is correct. You will not have to pay a penalty if you show a good reason (reasonable cause) and I believe you qualify for it.

You may be able to have this penalty abated if you can show good cause. Reliance on a professional can be good cause. Your accountant can write the IRS describing the error and ask that the penalty be abated. If it is not abated the penalty should be paid by your accountant under the facts presented. You really do have to pay these fees and if you do not additional penalties and interest will be added. Eventually, the IRS can begin enforced collections including levies and liens.

I'm not sure what the issue here really is, however it doesn't sound like you have stated all the facts. Usually, there is no penalty unless there is tax owed and the tax is not paid timely. A return filed late for which no tax is owed, or even where a refund is due will not be penalized -- normally. However, if you owe tax, then you have to pay the tax with the extension, otherwise you'll get a penalty and also an interest charge even if you file an extension. I would take the IRS's correspondence and my returns to either a tax attorney or a cpa (not a return preparer, but a real cpa) and pay for an hour to see what is really the issue. Often if there is a problem the preparer you have may or may not be willing to actually tell you the whole story. Most "accountants" in Colorado are not Certified Public Accountants. Anyone calling themselve a "Public Accountant" is not a Certified Public Accountant. By the way, while most lawyers require a retainer and provide "full representation" which means that they handle your matter for you and charge for everything, some attorneys sell "unbundled" or "limited" legal services where you pay for just what you need and can afford. For example, some attorneys will give you an hour or two at a set price to review your issue and give you advice based on the law, prepare letters for you to sign, or sell the paperwork for the court filings; then you can proceed on your own, but knowing that your paperwork is correct and having a road map as to how to proceed. Or who will attend a hearing for a flat fee. jim [email protected] NOTICE— The Legal Information contained in this answer is provided solely for informational purposes to assist the layperson in understanding general legal concepts and terms, it is not legal advice nor does it create an attorney-client relationship between you and me or my law firm. This response is provided for general informational purposes only and should be used only as a starting point for addressing your legal issues. It is not a substitute for an in-person or telephone consultation with an attorney licensed to practice in your jurisdiction about your specific legal issues. Because this website format is limited, all facts necessary for complete advice are not available and the information provided cannot be complete. Questions and answers or other postings to the Site are not confidential and are not subject to attorney-client privilege.