About IRS penalties.
Did you fail to pay your taxes on time? Did you fail to timely file your tax return? Did you run afoul of the other Code sections that allow the IRS to assess penalties?
Have you received one or more IRS notices saying that you owe a significant amount in penalties?
If this is the case, you are certainly not alone. Millions of people in the U.S. are penalized by the IRS over real or perceived problems or actions.
The first and most important thing to do is think clearly about the circumstances that lead to the penalty. It is often possible to have penalties removed if you can show that you acted in good faith.
The most common reasons for tax-related penalties.
There are over 150 kinds of civil penalties in the U.S. Internal Revenue Code, ranging in severity which is reflected by the severity of the applicable fines. Most of the time, penalties are assessed automatically by the IRS computers. So it makes sense that there are sometimes errors and that your unique circumstances are not factored into the decision as to whether penalties are even proper.
Here are some of the most common reasons for tax penalties:
- Not filing on time
- Not paying your taxes on time
- Filing a frivolous return
- Accuracy and negligence issues in reporting taxes on your tax returns
- Intentional disregard of the rules in reporting taxes on your tax returns
What to do if you believe you have been assessed a penalty in error?
It is up to you to make a case that penalties should not be assessed. That’s why it’s important to see a tax professional if you think you penalties should not apply.
There are other avenues for obtaining penalty relief that should also be considered. If you have not had any previous issues with the IRS, they may apply a first-time abatement rule if you request it. If you act in good faith and demonstrate compliance with the policies in the IRS’s penalty handbook, penalties may be let go. The IRS also offers other programs to help with these types of situations, such as the offshore voluntary disclosure program and streamlined filing procedures for foreign accounts and reporting.
If you have received an IRS notice indicating that penalties are due, contact us right now and let us help you find a solution.
Why abatement may be a realistic option for you.
If you are facing tax penalties, you will probably have a sense of how quickly the penalties and interest on the penalties can add up. Interest is not normally a charge that can be reversed; however, penalties can often be abated with the help of a tax professional.
If you have special circumstances which made it impossible to pay your taxes on time, you can request that the penalties be removed and may have a good chance of having them removed.
In order to get penalties abated, you need to prove your case. Some examples of legitimate reasons for this include:
- Family death or illness
- IRS errors
- An incorrect address or postage amount
- Destruction of records for reasons outside of your control (e.g., a fire, a natural disaster, etc.)
- An absence that was beyond your control (e.g., a required hospital or prison stay)
- Incorrect instructions given by the IRS or a tax professional
- A liability stemming from an unusually complex area of tax law
Act now to get your penalties abated.
If you believe that you have circumstances beyond your control and that you have been contacted by the IRS about unfair penalties, contact us as soon as possible.
We are former IRS attorneys, appeals officers, and auditors who help taxpayers with penalty abatement requests. We offer compassionate, individualized service at the most affordable rates.
Call today for a free, confidential consultation. Our number is 713-909-4906.