How to Avoid Audit-Related Penalties
No one thinks of an IRS audit as fun or desirable, but if you believe things are heading in that direction or have just completed the audit process, you will want to be sure that you do everything possible to avoid audit-related penalties. So how can you achieve this?
If the audit finds that you owe more in taxes to the IRS, pay it quickly to avoid any additional interest or penalties. If you can pay this in full, all the better. If not, the IRS actually suggests that you consider accruing other debt in order to pay this off (home equity loan, credit card, etc.).
If you are unable to find a way to pay the amount, then you will want to enter into an installment agreement with the IRS. This means you will pay what you owe over a period of time. You will still have to pay the IRS interest on what you owe them, but your interest and penalties will be significantly less than if you do nothing after an audit.
If you have a “reasonable cause” for your payment problem, then you can request that the IRS waive your interest and penalties. This is not always granted (as you might expect) and the IRS has very high standards for granting this such as a serious illness, military deployment, etc.
Offer in Compromise
In certain instances, the IRS will settle your debt for less than you owe if you can prove that your circumstances are such that you are unable to pay. This is a last resort option as they generally grant less than 20% of these each year. But, occasionally, they realize that getting some of their money is better than getting none of their money.
After an audit, make an effort to pay your taxes on time each year. The IRS can (and sometimes does) look harder at those who have already had their tax returns flagged as more likely to grab the attention of the IRS again. So stay on top of your taxes and you’ll save yourself time, stress and money!
Get Help If You Need It! Call Success Tax Relief
If you find that you need assistance managing your tax debt or avoiding audit related penalties, consider getting the help of a reputable tax firm. Success Tax Relief specializes tax debt relief, audit preparation, and more. We speak to the IRS on your behalf and help you apply for an offer in compromise or installment agreement if needed. The earlier you get on top of your situation, the better the outcome for your pocketbook. Contact us to speak with one of our trained professionals. Take advantage of our free consultations and get another perspective on how best to move forward given your unique tax situation. Do not delay, contact us today. Relief is just a call away!