Do You Qualify for Tax Penalty Abatement?
Did you know it is possible that you may qualify to have some of your tax penalties waived or reduced? There is a little known tax law that few taxpayers are currently taking advantage of that can result in the reduction of tax penalties for those requesting it for the first time.
A first time tax penalty abatement (FTA) allows a taxpayer who has unpaid tax debt and penalties to apply for an abatement of certain penalties during a single tax period. We have pulled together information that may help you determine if this might be applicable to you.
Types of penalties that are eligible for a first time abatement
- Failure to file penalties
- Failure to pay penalties
- Failure to deposit payroll taxes (in the case of a business)
Do you qualify?
- You must not have accrued any penalties over the last three years.
- You must be up to date on filing your tax returns and not have any outstanding correspondence requests from the IRS about unfiled returns.
- You need to have paid (or have made an arrangement to pay) the actual tax debt that is due.
How to Apply for a First Time Penalty Abatement
If you think that you might be eligible for tax penalty abatement, you will want to make a strong case. You can apply in a number of ways. The IRS accepts applications in writing, by phone or electronically through their website. You should plan to include background documentation and the reasons behind why you believe you should receive the abatement. You should indicate that you meet the criteria to qualify as well.
Reasonable Cause Abatement
If you do not meet all of the qualifications for a first time penalty abatement, you may instead apply for a reasonable cause abatement. The IRS does seem to be empathetic to taxpayers when it comes to penalties. Here are some of the most commonly used reasonable causes for penalty abatement:
- Death or illness
- You filed your return with the wrong IRS office
- A mistake made in spite of normal business prudence
- Inability to obtain records or tax forms
- Followed advice from the IRS or a tax professional
- Error by the IRS
You should note that these reasons will not automatically qualify you for a penalty abatement. It is up to you to make a strong case for this and the IRS has the latitude to accept or deny your request. A convincing and compelling argument will help and is more likely to be granted than a more limited plea that points to general forgetfulness.
Contact Success Tax Relief Today
If you are considering requesting a tax penalty abatement from the IRS, you may decide it is wise to get some help from a reputable tax firm to save you time and help you build a compelling argument.
Success Tax Relief has 30 years of experience helping taxpayers negotiate various settlements with the IRS, including tax penalty abatements. These requests can take significant time and energy—Success Tax Relief can take this off of your plate and help you achieve the results you are looking for. Give us a call at 1-877-958-6638 to talk your case over with our team!