The IRS uses many tactics to ensure that we (The American People) stay honest and compliant when it comes to filing and paying our taxes. One of their best tactics assessing penalties and they are easy to hand them out should we not stay on top on our tax filing and paying game. Luckily they have come to realize that in some instances, life just happens and for one reason or another we just cannot get to certain things on time, so the IRS has established some relief when it comes to abating or removing them
There are essentially two types of penalty abatements the IRS grants:
- First Time Penalty Abatement: the name says it all, First Time, the IRS will allow a waiver or abatement of certain penalties (failure-to-file, failure-to-pay or failure-to-deposit) considering the following circumstances.
- You have not claimed this waiver in the past three years
- You are compliant, meaning all current returns have been filed
- You have paid or agreed to pay any pending tax due.
- Reasonable Cause, any of the following circumstances could have occurred to cause you to file or pay late and you can provide evidence of such:
- There was a death or serious illness in your family or you were absent for a reason beyond your control
- You lost documentation in a Fire, casualty or natural disaster and you were unable to file
- You were unable to obtain records that were required for you to file your taxes timely
- A mistake was made in the filing or payment of the taxes
- You received bad advice or relied on a tax professional to carry out these duties on your behalf
- You received oral or written advice from the IRS directly
- You met all ordinary business care and prudence but were still unable to comply
- Economic Hardship (only available for failure-to-pay penalty)
Most people are not aware that the IRS offers these kinds of relief, one of which is easily obtained by simply calling the IRS. For the First Time Penalty Abatement, simply calling and requesting it will take care of that penalty and save you some of that hard-earned cash.
Please keep in mind that when requesting Reasonable Cause, the IRS will require that you establish proof or provide evidence of such cause and this must also prove that these were circumstances out of your control. The IRS will determine the eligibility on a case by case basis given the information provided.
Using the Reasonable Cause option may require you writing a letter to the IRS and I highly recommend that you give as much detail as possible about your “reasonable cause” for not filing or paying so that they can have a clear understanding of your situation and be sure to include as much backup documentation to prove your cause.
These are just some of the ways that I help my clients become IRS Debt-Free, by reducing or eliminating their tax debt. My practice, IRS Debt-Free, Inc., in Miami, FL, is dedicated exclusively to helping people with IRS debts by providing them with all the tools and resources they need to become IRS Debt-Free!
Join me for a FREE WEBINAR that will help you determine if you qualify for tax relief.
You have nothing to lose except the tax debt!