What Should I Know About First-Time IRS Penalty Abatement?

If you owe the IRS penalties on top of tax debt, you may qualify for the IRS’ penalty abatement program. Every year, the IRS assesses billions in tax penalties. According to Nerdwallet.com, in 2017, individual taxpayers accumulated more than $11 billion in penalties. Few people know that the IRS is sometimes willing to reverse specific tax penalties through its IRS penalty abatement program. Do you have penalty fees that are causing your tax debt to grow? You may be eligible for IRS penalty abatement. Read on for more information about the IRS’ penalty abatement program, and how you may qualify for relief. If you’re interested in applying for an IRS penalty abatement, contact the experts at Platinum Tax Defenders. We have more than a decade of experience helping clients reduce their tax debt.

Who Qualifies for Penalty Abatement? 

The IRS charges penalty fees if you don’t file a tax return and if you don’t pay on time. However, if you meet these three criteria, the IRS may reverse its penalty charges. To qualify for penalty abatement, here’s what you need to know.

–    First, you must be current on filing tax returns. It’s okay to have a tax extension request on your record.

–    Second, you must also be present on your tax bill. If you owe taxes, you must at least have a payment plan in place with the IRS.

–    Third, your tax record must be clean. You can’t have penalties charges for the three years before the tax year during which you receive the penalty.

If you’re in compliance with the IRS, file on time and don’t accumulate any additional penalties, you may qualify.

How Do I Request An IRS Abatement?

The IRS will only approve you for a penalty abatement once. You can request an IRS abatement by calling or writing the IRS. However, speaking directly to the IRS can often be overwhelming. Talking to the IRS on the phone may result in faster results. However, speaking with the IRS can be an intimidating task. If you work with a tax resolution firm, they will do the talking for you, so you don’t have to. Penalty abatement will typically not get you relief from the interest the IRS adds to your tax balance. However, if there’s interest from penalties, you can receive IRS abatement for the interest as well. 

What Forms Do I Need To Apply For Penalty Abatement?

The IRS requires you to fill out Form 843 when applying for penalty abatement. On this form, you tell the IRS which penalty they should refund and why. You can typically request a reduction for penalties dating back two or three years, depending on your circumstances. Sometimes, the IRS may approve abatement for penalties before three years. A tax resolution expert can determine how many years back for which you may qualify for penalty abatement. Whenever you’re attempting to negotiate with the IRS, a tax relief specialist can often get you a better deal. The IRS understands that when you’re working with a tax relief expert, you are serious about your case. For that reason, the IRS will often work through your case quicker, getting you a faster answer to your requests.

What If The IRS Denies My Penalty Abatement Request?

If the IRS denies your penalty abatement, you can appeal the decision if you still think you qualify. Additionally, if you don’t qualify for penalty abatement, you may want to ask for tax relief due to reasonable cause. If you have penalties due to a mistake, you won’t qualify for assistance due to reasonable cause. Penalty relief due to a reasonable cause is available for people who experience:

–    A death in the family

–    Home emergencies such as a fire or other natural disaster

–    Medical trauma

–    Dire situations

To receive approval for penalty relief, you must provide documentation such as:

–    Hospital records

–    Court statements

–    Other evidence that supports your claim

When Should I Get Help With My Penalty Abatement?

The IRS does not require you to hire a specialist to request a penalty abatement. However, if you aren’t sure about the details of your penalties, working with a tax relief specialist is beneficial. It can be difficult speaking with the IRS if you don’t understand the IRS’ rules and procedures. A tax resolution specialist will know these rules and systems like the back of their hand. 

What Is The IRS Penalty for Underpayment of Estimated Tax?

The United States income tax system is pay-as-you-go. What this means is, you must pay income tax as you earn or receive income during the year. You can pay taxes through withholding or making estimated tax payments. However, if you don’t pay enough throughout the year, you may have to pay a penalty fee for underpayment. Most taxpayers can avoid this penalty if they owe less than $1,000 in taxes. Additionally, taxpayers can avoid this penalty if they pay or withhold at least 90 percent of the tax for the current year. 

The IRS can waive the underpayment penalty if:

–    You did not make a payment because of a casualty, disaster, or other unusual circumstance

–    During the tax year, you become disabled or retired

–    Your underpayment was due to an inability to calculate your estimated income tax payment accurately

Talk To A Tax Relief Professional About Your Penalty Abatement Request

At Platinum Tax Defenders, we will assess your circumstances to determine if the IRS will waive your penalties. Platinum Tax Defenders understands what the requirements are for first-time IRS abatement. Before you go through the process of applying for a penalty abatement with the IRS, speak to a tax professional. Platinum Tax Defenders has the expert knowledge and experience to resolve your tax debt. We can challenge every part of your debt, including penalties. Our team can evaluate and explain any qualifying conditions that fit IRS criteria for penalty abatement. We can also cover the preparation and submission of forms necessary for successful penalty abatement. Our team also has experience initiating appeal motions. Call Platinum Tax Defenders today for a hassle-free experience. We’ll handle all the technical aspects of penalty abatement. 

Leave a Reply

    free consultation


    Tax Problem
    How Much Do You Owe in Past Tax?
    Additional Info
    Actual Client Results
    Client IDOwedSettlement
    Recent Savings: $1,012,060
    how can we help you?

    Contact us at the Platinum Tax Defenders 

    I received a letter from the IRS and it says that I didn’t file my taxes. In order to get some assistance, I found Platinum Tax Defenders! The staff took time on the phone with me to really understand my situation also my needs. The staff was friendly and helpful. I highly recommend Platinum Tax Defenders!!!

    Martha B
    Tax Relief, www.bbb.org