Do I Qualify for an
IRS Penalty Abatement?
If you failed to file your taxes on time, the IRS will likely send you a notice of failure to file along with an amended tax bill. If you received an additional assessment, this means that the IRS believes that you owe more money. If you cannot pay the bill, you’ll need to take action and respond to the letter from the IRS as soon as possible. To do so, you’ll need to know if you qualify for an IRS penalty abatement. This article explains what an abatement is and how it can help reduce your taxes. Keep reading to find out more.
What is a Tax Penalty Abatement?
A Penalty Abatement is an IRS waiver that reduces or eliminates your penalty for failure to file taxes. This penalty is usually 5% of the amount due on your taxes, but it could be as high as 25%. It’s important to file your taxes as soon as possible after the due date passes. If you miss the deadline and still want to file, you’ll need to request an extension. You can do so online or by phone. If you file for an extension, you’ll need to pay any taxes you owe by the original due date plus any interest that accumulates. If you are unable to meet the filing requirements, you may qualify for an IRS penalty abatement. To qualify, you’ll need to prove that you had a good reason for missing the deadline. The IRS will review your case to decide if they should reduce or eliminate your penalty.
How Does an IRS Penalty Abatement Work?
The IRS will review your case to see if you qualify for a penalty abatement. You’ll provide them with a written statement outlining your situation and why you were unable to file on time. The IRS will then review your statement. If the IRS accepts your case, they will reduce or eliminate your penalty. However, to qualify for a penalty abatement, you will need to prove that you had a valid reason for missing the filing deadline.
The IRS will consider the following factors when reviewing your case.
- Circumstances beyond your control:
If you had extenuating circumstances that prevented you from filing on time, you might qualify for an abatement. Circumstances like a natural disaster or a medical emergency might qualify. - Poorly managed finances:
If your finances were poorly managed and you were unable to pay your taxes, the IRS might forgive your penalty. - Good reason to file late:
If you had a good reason to file late, the IRS might forgive your penalty. This could include a valid reason, like a medical emergency.
How to Qualify for an IRS Penalty Abatement?
To qualify for a penalty abatement, you’ll need to provide a written statement outlining your situation and why you deserve a break. The IRS will review your statement to decide if they should reduce or eliminate your penalty.
There are a few things to keep in mind when writing your statement.
- Keep it Short and Sweet
The IRS is more likely to accept your case if you keep your statement brief. - Be Honest
If you lie to the IRS or try to mislead them, they will likely deny your case. - Be Specific
Be as specific as possible about why you missed the filing deadline.
IRS Form 843
In order to request a refund or penalty abatement for reasonable cause, you must complete IRS form 843. The IRS Penalty Handbook is available online. After reviewing the form and handbook, you may discover that you would rather have a professional handle the situation.
Speak to a Tax Relief Specialist
A Family Tax Relief specialist will present the strongest possible argument for abatement of your penalties. We are confident that you will find our team of tax professionals not only competent and qualified, but exceedingly helpful even if you cannot afford professional representation.
