Ok so 10 years ago I was trying to make a music career and I wanted to do everything the right way to avoid problems later (ironically), so even though I wasn't making money yet, I registered for a sole proprietorship and sales tax because I planned to sell music, shirts, etc.

    The total sales I ever made, mostly in the first couple of years, was probably little over $500. Still I dutifully collected, filed, and remitted my tiny sales tax every quarter. After a few years I was still performing but not selling merch anymore, but I still filed my $0 sales revenue every quarter. It was only the beginning of last year I got a very time-consuming full-time job and quit music altogether. At some point I read that you don't have to close a sole proprietorship and I didn't realize that sales tax registration was still a separate thing that needs to be closed. I certainly didn't realize that you could be charged $5k a year for not doing it.

    Fast forward to today. I never got any notices before, but literally today I just got a notice warning me about the first quarter I missed filing (Q1 2025). Doesn't mention anything about past or future penalties, just "File the missing tax return within 30 days of this notice." And that I need to officially close the business's tax registration if it's closed. After jumping through some hoops to log into their new system, I go to fill out all the missed $0 quarters in order to close the registration, and to my absolute horror I find $5500 in penalties and interest.

    I don't make a lot of money and have a lot going on atm, so even $100 sounds like quite a lot to me and I'm freaking out. I already caught up on all the filing and I'm going to call the state as soon as the workday begins, but what are the chances they will waive all the penalties and interest? What should I say to them to maximize my chances, just tell them the whole story or what?

    $5500 in late fees and interest for dormant business I forgot to close, which barely made any money (NJ), will this be waived? What to do?
    byu/NurEineLernerin intax



    Posted by NurEineLernerin

    1 Comment

    1. Barfy_McBarf_Face on

      file the $0 balance due returns – the $5,500 is likely their estimate (and it’s obviously very high) of what your taxes were.

      Usually with late $0 balance due returns, the penalties are something like $100, not $5k

    Leave A Reply