IRS Tax Penalty Abatement Program

There are multiple reasons why you may have fallen behind on your taxes and incurred a few penalties. The Internal Revenue Service (IRS) uses tax penalties to encourage taxpayer compliance, not to make money. Therefore, the IRS created the tax penalty abatement program for tax offenders who are normally compliant, this is an opportunity to reduce or eliminate IRS penalties.

This program can save taxpayers hundreds and even thousands of dollars. Unfortunately, most taxpayers do not know about it. Many individuals who might qualified for tax forgiveness under the abatement plan fail to utilize it. Part of this is due to taxpayer ignorance of the program.

Reasons the IRS will Remove Penalties

Of course, the IRS will not waive tax penalties for everyone or in all circumstances. Individual taxpayers can use the forgiveness program to request relief from penalties related to a failure-to-file or failure-to-pay. Penalties for errors in estimated tax payments or for inaccuracies on your return, however, are not eligible for the forgiveness program.

Businesses may also request tax penalty abatement if faced with penalties for failure to file, failure to deposit, and failure to pay.

First-Time Abatement Waiver

In order to qualify for a first-time abatement waiver, you need to have a good track record with the IRS. This means that the IRS has not issued you any tax penalties for the last three years. You will also qualify if you have not ever had to file a return in the past.

To be eligible, you will also have to be compliant with your current year’s tax return. This means that you filed your return by the due date or filed an extension. It also means that you have paid your taxes or arranged to pay them with an IRS payment plan.

Reasonable Cause

If an unexpected situation puts you behind to the IRS, you might be able to avoid paying any related penalties under the reasonable cause exemption. Reasonable causes include fire, natural disasters, serious illness, or circumstances similar in nature. Do not expect the IRS to take your word for it, however. You may need to prove that you experienced a disaster and/or illness.

Forgiveness Options

I can answer your questions about any tax penalties you are currently facing and the forgiveness options. I encourage you to contact and schedule an appointment.