Hi there,
Client of mine is the sole shareholder of a C-Corp and did not file returns for the past ten years. In seven of those years, the C-Corp has posted a loss. In the other three years, loss carry-forwards are sufficient to zero out the profits. So net income was always zero and tax due was always zero.
I looked in the instructions for the Form 1120 for the various years, and it appears that if a corporate return is more than 60 days late and the taxpayer owes no tax, there is a fixed penalty, which is $100 for the earlier years and then $135 for the later years.
My question is, does the IRS charge interest on this unpaid penalty? The instructions don't indicate anything about this and the IRS website is no help.
Thanks,
Chris Johnson, EA