Penalty Abatement

How to Qualify for IRS Penalty Abatement

An affordable tax debt amount can become huge when you include IRS penalties and interest. Nevertheless, it's possible to remove IRS penalties and considerably lower the tax debt amount. If any of the scenarios caused the tax debt, you have a case for penalty abatement and you must get in touch with a professional right away: Natural catastrophe, tax records lost or destroyed, set income (or retired), victim of theft, victim of bad monetary advice, or victim of serious health problems.

So what is Penalty Abatement and how does it work?

The most common IRS charge relief program used is called "Reasonable Cause". The Internal Revenue Manual offers the following meaning. "Reasonable cause relief is normally granted when the taxpayer works out normal business care and prudence in determining their tax responsibilities however is unable to abide by those obligations."

Basically, that indicates something has taken place beyond your control that has actually triggered you not to submit or pay your taxes in a prompt way. You also have to show that you (the taxpayer) took reasonable actions to "counter" the occasions and were still not able to pay and or file prompt.

IRS Penalty Abatement Program
IRS Penalty Abatement - Carter Vest Law

The following list is drawn from the IRM or Internal Revenue Manual that provides the guidelines of what IRS representatives are advised to look at when considering penalty abatement:

  • What are the events that happened, when did it happen, and why did these occasions avoid you from adhering to the tax law?
  • How were your other affairs handled during this time? Did the you (or does it appear) single out the IRS not to be but paid other lenders?
  • What steps were required to try and mitigate your situations? Normal company care and prudence is closely taken a look at here.
  • Exists a direct "timeline" correlation in between what occurred and the taxes being file late or not paid?
  • Is there a history of filing and or paying late? The IRS is going to take a look at your history; repeat transgressors, have a tougher task persuading the IRS that this was not intentional.
  • Were the situations "beyond the control of the taxpayer" really unavoidable, and could not be expected? If so, this normally establishes sensible cause.

Documents will be the bulwark of your case. Offer as much proof of what you are arguing as possible. The "third party" evidence you produce the much better the opportunities for relief.

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