Fighting for Tax Penalty Abatement - El Cerrito, CA

Education & Training with Financial Harmony Tax Resolution LLC

Have you missed the payment deadline and have interest and penalty charges tacked on? It might be a nightmare, especially if your budget is tight. Fortunately, there are instances when penalties may be reduced or altogether eliminated.

Here are four examples of such situations.

  1. reasonable-causeĀ 
  2. statutory exceptions
  3. administrative reasonĀ 
  4. IRS error

(1) Reasonable-cause If the reason for the violation has a reasonable cause, the IRS may abate the penalty and interest.

Here are a few examples. COVID caused a taxpayer to miss the deadline due to being in hospital for an extended period.

The filing deadline was missed due to the failure of a third party to provide the needed documentation.

Because of natural disasters, the taxpayer could not submit a tax return on time.

Each case will be evaluated based on the specifics and circumstances of the individual situation.

(2) Statutory exceptions The IRS has provisions in the tax code that can suspend or eliminate penalties and interest for taxpayers who fulfill specific requirements. The following are three examples of such provisions.

This is the first time in three years that the taxpayer was non-compliant. This is called a first-time abatement.

The return was mailed on time, but it was still considered late.

If it is a new retiree or a disabled taxpayer who owes taxes.

(3) Administrative cause If the IRS is determined to have made a mistake, causing you to miss your deadline, it may reduce or waive the fine based on this basis. For example, in response to the COVID epidemic, the IRS implemented a work-from-home strategy. During the adjustment period, IRS personnel may have had limited access to files each day, causing an unreasonable delay in processing files. In these circumstances, IRS administrative waivers might be granted.

(4) IRS Error

Everyone makes a mistake. So does the IRS. Your tax assessment may be incorrect owing to a mathematical error or a clear misinterpretation of the law. Penalties and interests may be removed if the case can be justified rationally using evidence.

If you have any questions about the OIC or other IRS tax issues in the Bay Area, please feel free to contact us at (510) 828-6215 (Ralph); (341) 766-1247 (Kenny) or by checking out our website,

Comments (1)

Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Ralph. Great tips for those who have a problem. Seems like, with proper representation and knowledge, there are remedies. Enjoy your day.

Jun 14, 2022 05:13 AM
Ralph Nelson

Yes, life-changing remedies do exist. That's what keeps me going.

Ralph Nelson, EA

May 23, 2023 04:59 PM