How To Request An IRS Waiver of Tax Penalties and Interest

When you don’t pay back taxes, or fail to file taxes, your debt only becomes more significant. The reason your tax debt increases is because the IRS continues to charge penalties and interest. However, if you have a good cause, you may be able to get the penalties waived. The IRS understands that, sometimes, you need a little tax relief. We all get into hard financial times where it’s difficult to make ends meet. The government knows that it’s tax debt relief that you sometimes need to get back on your feet. There are specific tax penalties that the IRS may waive, depending on your circumstances. If you’re considering applying for a tax penalty waiver, seek out a tax relief professional first. A tax relief expert will know for which penalties you’re eligible. Additionally, a tax relief professional can help you apply for a tax penalty waiver.

What tax penalties are eligible for relief?

The IRS allows taxpayers to apply for relief for several types of common penalties. Below are some of the types of tax penalties for which individuals can use. As a note, this is not an exhaustive list. If you have tax penalties from which you’re seeking relief, contact a tax resolution professional. The experts at Platinum Tax Defenders have been helping clients with tax relief for over 10 years.

Tax penalties eligible for relief

–    Penalties for individuals who fail to file a tax return

–    Tax penalties for failing to pay taxes on time

–    Failure to deposit individual taxes as required

Taxpayers may request tax penalty relief for any of the above penalties. There may be additional penalties for which you could qualify for assistance. However, the IRS considers aid from other penalties on a case by case basis. It’s important to note that failure to file is different from failure to pay. If you must choose between the two, it’s better to file on time and pay late. Why? The penalties for paying late are much lower than penalties for filing late.

What types of tax penalty relief does the IRS offer?

The IRS offers three different types of tax relief for penalties, depending on why you originally received the penalty. Before applying for tax relief for penalties, consult a tax relief expert. A tax resolution professional will look at your situation and determine which form of tax relief is for you. You can request tax relief due to reasonable cause, first-time penalty abatement, or administrative waiver. Additionally, you can also request a statutory exception for tax relief from penalties. Before deciding which tax relief option you believe is right for you, consult a tax relief expert. The professionals at Platinum Tax Defenders have been helping their clients with tax resolution for more than 10 years.

Reasonable Cause for Tax Penalty Relief

If you are claiming reasonable cause in your request for a tax penalty waiver, you must have a good reason. You must prove to the IRS that there are factors that have kept you from taking care of your taxes. Additionally, you must show the IRS proof of these circumstances. 

What counts as reasonable cause?

Fire, natural disaster, death in the family, and other serious situations count as reasonable cause. Each year around the U.S., thousands of Americans get hit with natural disasters, from extreme weather to tragic fires. If a natural disaster has struck your home or business, you can apply for a tax penalty waiver. 

Additionally, if you are unable to obtain your tax records, the IRS may grant you tax relief. Other situations that count as reasonable cause for tax relief from penalties include:

–    Death, serious illness, incapacitation, or unavoidable absence of you, the taxpayer, or a member of your immediate family.

Forgetting to file or pay taxes does not count as “reasonable cause” to the IRS. You may be able to get tax relief if paying taxes will cause you financial hardship. However, economic hardship should not prevent you from filing your taxes on time. 

What proof does the IRS require when considering tax relief for penalties?

When applying for tax relief from penalties, you’ll need to present proof that supports your reasonable cause. The IRS will need information regarding the following before moving forward with your tax relief case. It’s advisable to speak with a tax relief professional before proceeding with applying for tax relief from penalties. A tax resolution expert will ensure you have all the right documents before speaking with the IRS.

–    Information on what happened, and when it happened

–    Facts and circumstances surrounding why you didn’t file your return or pay taxes on time

– Details on how your situation kept you from filing or paying taxes

–    Once your situation improved, did you file and pay your taxes on time?

–    This note is for businesses, estates, or trusts. If the previous receive a penalty, did the affected individual have authority to file, pay, or make a deposit? 

Other types of proof the IRS accepts for tax relief for penalties

The IRS will also accept other types of evidence of your situation that led you to file or pay taxes late. If you were sick, you can submit hospital records or a doctor’s note. You can provide documentation of a natural disaster or other events that kept you from filing or paying on time.

First-time penalty abatement for tax relief from penalties

For first-time late payers or filers, you may be eligible for first-time penalty abatement. You can apply for penalty abatement for failure to file, failure to pay, and failure to deposit taxes. The following is when a first-time penalty applies.

–    The taxpayer wasn’t required to file a return, or has no tax penalties, for three years before applying.

–    You have submitted all the necessary forms or filed an extension for more time to file.

–    The taxpayer is arranging payment for any tax due

Additionally, you may qualify for administrative tax relief if you receive incorrect advice verbally from the IRS. Before applying for a first-time penalty abatement, consult a tax relief professional. A tax resolution expert will increase your chances of getting approved for first-time penalty abatement.

What are statutory exceptions?

If you receive incorrect written advice from the IRS, you may be eligible for a statutory exception. To apply for a statutory exception, you must present documentation to support your case. Documentation may include:

–    A written request for advice

–    The incorrect information you received from the IRS and on which you relied

–    Report of tax adjustments identifying the penalty or addition to your tax. Additionally, you must show proof of the items relating to the use of incorrect advice.

In all cases above, you must show documentation proving your case for tax relief from penalties. Before you apply, consult a tax relief professional. The experts at Platinum Tax Defenders have been helping their clients get tax relief from penalties for years.

Get Help From A Tax Relief Professional

Hiring a tax relief specialist can get you a better deal when attempting to get tax relief from tax penalties. A tax attorney can help you determine which tax relief solution is right for you. The tax resolution specialist can also negotiate with the IRS on your behalf and submit the necessary paperwork. Owing tax penalties can leave you in bad financial shape. The IRS only wants to get what money you owe them in penalties. Often, they are willing to help you get tax relief from penalties, but you have to know how to try. That’s where a tax relief services company can come in handy. When you hire a tax resolution professional, there are other methods you can use to avoid costly tax penalties. Call Platinum Tax Defenders for a free consultation today.

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