PENALTY ABATEMENT

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Did you receive a notice from the Internal Revenue Service saying you owe a penalty? Since there are over 150 different kinds of IRS penalties, it is important that rather than just blindly paying the amount the IRS says you owe, you take the time to learn why the IRS is charging you the penalty and determine whether the notice is correct, or if the information they have is in error. If you do not agree with the facts of the letter or wish to try to get the penalty reduced or eliminated, in many cases you can get the penalty wholly or partially removed. It is important you respond timely to Internal Revenue Service notices to ensure you retain all your rights. We have assisted hundreds of taxpayers in having their penalties reduced or eliminated. If you have any questions you would like additional information, give us a call at 1-800-408-3122 or email us at taxhelp@iowetaxes.com.

What is a penalty abatement with the Internal Revenue Service?

A penalty abatement is a tax resolution technique often used to lessen, and possible eliminate a balance due to the IRS either for a specific period or for multiple periods. One of the most common ways to reduce penalties is to carefully state your individual situation, explaining how you used due diligence and tried to comply with the IRS, but despite your best efforts were unable to comply. When stating this case, you request an abatement of penalties due to reasonable cause. Other common techniques, if you qualify, are to request a one time penalty abatement due to your situation and filing history, or to show where the IRS is in error with their assessment of penalties to you.

What if the Internal Revenue Service rejects my request for penalty abatement?

If your request for penalty abatement is rejected, you still have an opportunity to appeal the decision. An appeal has to be made in a timely manner however, so be sure to file any appeal within your window to appeal, or you lose valuable rights. Also keep in mind that a penalty abatement decision may include a partial abatement of penalties, which can still save you substantial money if successful.

Reasonable cause

If a taxpayer can show they exercised ordinary business care and prudence, in many situations it is possible to qualify for abatement of IRS penalties.

First Time Penalty Abatement

This type of penalty abatement is a waiver the Internal Revenue Service can give for failure to file, failure to pay or failure to timely deposit penalties if certain criteria are met.

Statutory Relief

If you feel you were assessed a penalty because of erroneous written advice from the Internal Revenue Service, it is possible to have a penalty waived due to a statutory exception.

Questions You Might Have

Are there a lot of different types of penalties the Internal Revenue Service issues?

There are over 150 different types of IRS penalties. The approach to trying to get the penalty forgiven will vary depending on the type of penalty.

Does the Internal Revenue Service have the authority to waive penalties?

Depending on the specifics of the individual situation, the IRS not only has the authority, but often reduces or eliminates penalties that have been assessed. It is also very important to examine the IRS notice explaining the penalty very carefully to ensure that the facts the IRS based the penalty on are correct.

What types of penalties are eligible for relief from penalties?

Depending on the particular situation, it may be possible to get relief from the most common penalties including failure to timely file a tax return, failure to pay tax on time, failing to make certain tax deposits on time and many other penalties.

What types of penalty relief does the Internal Revenue Service offer?

The Internal Revenue Service often reduces or eliminates penalties based upon reasonable cause. The IRS can remove penalties based upon a statutory exception and also, if you are a first time offender, it is possible in many situations to get a first time penalty abatement.

Can I get interest abated as well as penalties?

Interest by the Internal Revenue Service is charged by law, and while the penalties can be abated in many cases, the interest will remain provided the IRS notice is correct. However, the interest portion charged on any penalty amount that is eventually abated will also be removed.

How do I go about requesting relief from penalties from the IRS?

To request abatement, you or your representative will have to contact the Internal Revenue Service directly, explaining your individual situation in detail and providing any backup documentation that supports your position. This can be done by using IRS Form number 843, which is a Claim for Refund and Request For Abatement. You could also submit a detailed Penalty Abatement Request letter, instead of the Form 843 if you prefer to correspond by letter explaining the situation. There are also situations where the representatives at the telephone number on your letter may possibly be able to assist you depending on your unique situation.

Is there anything I can do if the Internal Revenue Service denies my request for penalty relief?

If the IRS does not initially grant your request for relief, you can still appeal the decision by carefully following the instructions provided in the IRS letter denying you relief. This is often not a quick process though and you should be aware that the process can take a year or more from beginning to end.

Do you have additional questions or need help figuring out the best course of action for your particular situation?

Call us at 1-800-408-3122 or you can email us at taxhelp@iowetaxes.com for a free no obligation consultation.

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PENALTY ABATEMENT