penalty abatement

If you fail to comply with all of the requirements of the Internal Revenue Service, you may owe various penalties for every tax year in which you did not comply. Fortunately, many taxpayers can qualify for an IRS penalty abatement, which allows them to settle their accounts with the IRS without paying any more than they need to. Consult the information below to determine whether you may qualify for penalty abatement.

About IRS Penalties

The IRS assesses penalties against taxpayers for various reasons, and more than 100 different penalties can be considered. However, some of the most common penalties assessed include the following:

  • Penalties for late filing
  • Penalties for late payment of taxes owed
  • Penalties for substantial understatement
  • Penalties for negligence
  • Penalties for late federal tax deposits

The penalty for failing to pay the taxes you owe on time accounts for more than half of all penalties assessed by the IRS.

What Is Penalty Abatement?

When the IRS abates penalties, it reduces or eliminates them. The IRS may elect to reduce your penalties if you have any good excuse for why you owe the penalties, generally known as reasonable cause. Some examples of situations that might help you qualify for penalty abatement include:

  • Living in an official disaster area
  • Being ignorant of the law led to the penalties
  • Making an honest mistake
  • Receiving inaccurate advice from an IRS representative or tax advisor
  • Experiencing significant financial hardship
  • Death or serious illness affecting yourself or a loved one
  • Inabilities to comply because of an unavoidable absence, such as time spent in prison or a coma
  • Inability to obtain the records needed to comply with IRS requirements

The First-Time Abatement Rule

An administrative waiver is one of the easiest ways to qualify for penalty abatement. If you have not had penalties assessed against you in the past three years, you can typically use the First Time Abatement Rule to obtain this waiver and reduce the total amount of your penalties. To get an administrative waiver under the First Time Abatement Rule, you must submit a formal request for penalty abatement to the IRS in writing.

Remember that the minimum requirement for penalty abatement under this rule is only if you have submitted all of the required tax returns on time and are in full compliance. You must also have made arrangements to pay any tax you owe.

Can My Interest Be Reduced Or Eliminated?

If you owe back taxes or penalties, the IRS will also charge interest. Unfortunately, penalty abatement will not typically eliminate interest. If interest accrued on the penalty itself, it will be reduced or eliminated when the penalty is reduced or eliminated. However, interest on back taxes cannot typically qualify for an abatement. The only situation in which a taxpayer may qualify for interest reduction is if the taxpayer can show that the interest should never have been applied or that the IRS is responsible for significant delays that caused more interest to accumulate.

Can I Get Help With Penalty Abatement?

If you owe penalties to the IRS, you may have a better chance of qualifying for penalty abatement if you seek assistance from a tax relief professional, such as the Enrolled Agents at Peace Of Mind Tax Help. A tax relief professional who understands all the laws that led to assessing your penalties and the laws surrounding penalty abatement can help you take the proper steps to reduce what you owe. However, not every tax professional has experience with penalty abatement requests. Therefore, before hiring a tax advisor to help you with this matter, ask them what training and experience they have about penalty abatement.

What if I Can’t Pay My Back Taxes?

IRS penalty abatement will not eliminate any back taxes you owe to the IRS. If you cannot afford to pay your back taxes, however, other relief programs may be able to provide you with IRS tax relief. For example, in some cases, the IRS will allow you to settle your total tax debt for less than the full amount you owe if you make an acceptable offer in compromise. Alternatively, if you think you will be able to pay your tax debt over time, you can arrange an IRS installment plan or IRS payment arrangement. In addition, depending on your circumstances, you may qualify for innocent spouse relief or another form of tax forgiveness. Finally, some taxpayers can eliminate their back tax debt through bankruptcy, although you must meet several requirements to take advantage of this option.

Peace Of Mind Tax Help Penalty Abatement Assistance

One of your most important rights as a taxpayer is your right to have a qualified tax relief professional, such as an Enrolled Agent (EA), represent you in front of the IRS and/or States and provide tax resolution for your IRS penalty elimination request to ensure that you have the best chance for removal of your tax penalties.

When you hire Peace Of Mind Tax Help to assist you with your IRS penalty abatement request, we will guide you through the process while advocating on your behalf and protecting your interests.

Peace Of Mind Tax Help is here to help you because when dealing with tax debt, any tax relief measure accompanied by a tax liability reduction is welcome. The worst thing you can do is do nothing and settle for the total amount of tax liability. The best decision is to take the necessary first step and obtain some tax debt relief!

Click on the “Get Peace Of Mind” button at the top of the page to take that first step.