Penalty Abatement

My husband has owned a small home improvement business for 23 years. In early 2004 he suffered a heart attack and didn't work again until late 2004. During this period of time our income was much lower and we failed to file the 2003 returns promptly because of his health issues and have been hit with non-filing penalties. Do we have any ground to dispute this?

Absolutely, this is clearly a case where there was a hardship and the primary officer of the company was unable to handle the day to day affairs. Although its not a certainty, complete documentation of the details of the illness, including a statement(s) from your physician(s) will go a long way. In addition, medications and orders to refrain from business activities help to build the case as well. If your husband has filed his returns promptly in the past and has been in good standing he stands an excellent chance of an abatement of the penalties.