IRS Penalty Abatement – Relief From Penalties
If you have an outstanding tax liability, the IRS (or state) oftentimes assesses additional amounts due in the form of penalties and interest that can and will be added to the original tax amount due. These additional penalties can result in a significant increase to the underlying tax debt. Generally, relief from penalties (known as a penalty abatement request) falls into one of four categories:
- Reasonable Cause is based on all the facts and circumstances in each situation and allows the IRS to provide relief from a penalty that would otherwise be assessed.Each case is judged individually based on the facts and circumstances at hand. It is important that a thorough and factual reasonable cause explanation is prepared with your abatement request by experienced tax representation, such as Tax Samaritan, to increase your likelihood for a penalty abatement based on reasonable cause.
- Statutory Exceptions: Tax legislation and the Internal Revenue Code may provide an exception to a penalty. At Tax Samaritan, we can perform the research to see if such relief is applicable to your situation,
- Administrative Waivers: This may occur in situations where there is a delay by the IRS such as in the issuance of revised tax forms, publishing guidance or other conditions,
- Correction Of Service Error: As unbelievable as this may sound, the IRS can occasionally make an error in computing or assessing tax. When identified by the taxpayer or a tax professional, IRS errors can be abated.
With assistance from experienced representation from Tax Samaritan, the IRS will consider proper and complete requests for penalty abatement (relief).
A simple penalty abatement request that is sent generally will not be sufficient. Most insufficient abatement requests are rejected. Nevertheless, it is always worthwhile to make a request – but the request must be well thought out.