In most cases involving a tax debt, interest and penalties accrue and become a very significant portion of the total amount due.
In an abatement, our attorneys will work hard so that it can be either eliminated altogether or adjusted to something much more reasonable. Penalty abatement can be one of the most significant savings vehicles for a taxpayer when it comes to resolving IRS tax debt. Proper attorney representation with the IRS typically leads to a very favorable outcome.
What is Penalty Abatement?
In certain situations, the IRS will agree to forgive tax penalties resulting from late filing a tax return, tax deposit or other tax payment, this is called penalty abatement. There are many different types of IRS tax penalties. To qualify for penalty abatement a taxpayer has to meet certain criteria and possess an acceptable reason for failing to pay their taxes or paying their taxes late. The taxpayer has to convince the IRS that their situation qualifies for penalty abatement in order to benefit from this provision. The reasons for penalty abatement according to current IRS guidelines include:
- Reliance on a tax professional
- Ignorance of tax law
- Medical illness (personal or a family member)
- Natural disasters
- Significant financial hardship
- Death in the family
First-Time IRS Tax Penalty Abatement
If you’ve paid and filed your taxes on time for the past three years but owe back taxes, the IRS will usually give you a break. First-time non-compliant taxpayers can request First-Time Penalty Abatement (FTA). This request applies to some kinds of penalties in a single tax period and could end up saving taxpayers considerable money. However, if you don’t have a clean record of paying your taxes on time for at least three consecutive years prior to the back taxes, you will not qualify for this type of penalty abatement.
How Do I File for Penalty Abatement?
Before filing for penalty abatement you’ll need to be sure you qualify and are able to communicate a convincing argument to the IRS. The experts at Rush Tax Resolution. understand what types of situations will qualify a taxpayer for penalty abatement and can help you file the necessary paperwork. To learn more or discuss your circumstances, contact us at request a consultation through our website.or