Penalty Abatement

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The Do's and Don'ts When Petitioning IRS Penalty Abatement

Most taxpayers hate paying IRS fines. Yet, they can file a relief from their penalties from the IRS. For the failure to file or pay the penalty, taxpayers can request penalty abatement. Abatement is an action removing the penalties from the taxpayer. Failure to file (FTF) and failure to pay (FTP) penalties generally require abatement because the IRS evaluated these penalties electronically.

Unfortunately, some don't request or deny relief because they do not follow basic practices to succeed. In some cases, requesting post-filing relief or abatement of penalties is not a practical move. However, for two of the most common IRS penalties, relief is available if you follow some simple rules demanding and securing abatement.

You may qualify for relief from penalties for failing to file a tax return, not paying on time, or deposit taxes when due under the IRS penalty abatement policy if the following are valid:

  • You did not file a return, or you have no fines before you received a penalty.
  • You filed all the current mandated returns or filed an extension of time for your filing.
  • You have paid or arranged to pay any of your delinquent tax debt.

Reasons that IRS Will Abate The Penalties

Reasonable Cause Relief (RC)

It is where the taxpayer can ascertain that they used ordinary care and prudence but can't comply on time due to unforeseen events outside their control.

IRS' First-Time Penalty Abatement Relief (FTA)

It can be used to abate both the FTF and FTP penalties for taxpayers who have a good standing with a clean compliance history.

When requesting FTF and FTP penalty relief, it is necessary to follow some best practices to succeed. Here are some of the do's and don'ts when requesting an abatement:

The Do's

  • Always utilize FTA
  • Make a reasonable and valid cause letter
  • Appeal adverse determinations
  • Be sure to include evidence of unfortunate events for the time of your non-compliance.
  • Show prior compliance
  • Follow up on abatement request

The Don'ts

  • Do not pay the penalty
  • Do not use abatement based on reliance on tax professionals and financial hardship for FTF
  • Do not forget to request abatement timely before the ordinance expires.

Successful penalty abatement can take some time but can be approved by phone instantly. To learn more, give us a call! Tax Experts For America are always here, ready to help you! We are your reliable and professional tax help that you can always rely on at any time! We also offer reliable IRS Payroll Tax Settlement services.

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