Tax Penalty Relief – Penalty Abatement

Tax penalties are specifically designed to be assessed on a taxpayer for failing to follow a certain procedure when it comes to taxes. There are many different types of penalties that can be assessed by the IRS and this article will focus mainly the Tax Penalty Relief – Penalty Abatement for three of the most common of all of the penalties that can be handed out.

The abatement of taxes that can be requested is not a guaranty and just because you request it does not necessarily mean that the IRS will accept your request and immediately put an end to the process of imposing and making attempts to collect the tax penalty. This is when having a tax professional from a tax defense company would come in handy.

Call us for a free and confidential evaluation at 1-888-498-2937.

3 Most Common Tax Penalties that are often abated

Failure to File/Failure to Pay Penalties

The penalties that the IRS end up imposing on a taxpayer really depends on many factors and depends on what exactly is the category in which the taxpayer’s actions fall under. Two of the most common failures by taxpayers that end being penalized by the IRS is when a taxpayer fails to file a tax return by April 15 or failed to pay the amount owed on the current tax return by April 15th.

The IRS does not take failure to act by any taxpayer lightly if you know that you are going to have an issue with your tax return you are better off being upfront and working with the IRS. The likelihood that you will get a much more favorable result if you do not attempt to shirk your tax responsibility.

In the event that you are assessed a penalty by the IRS, you will be afforded the opportunity to request a penalty abatement. By requesting this process be started you could make it so that any proceeding would be put on hold until the process can be completed. In order to help with the abatement process, you should seek the assistance of a tax professional.

Estimated Tax Penalty

The estimated tax penalty is one of the most difficult of the three penalties that we will be discussing in this article because there are not nearly as many ways to qualify for the abatement. You are required to prove that there was anything wrong in the way that the situation was evaluated when the penalties were assessed.

When it comes to requesting the penalty abatement there are three unique tips that we have included in this article. When it comes to tax penalty relief-penalty abatement these three things can have you figure it all out.

The IRS incorrectly credits the tax payment to the wrong tax year (will cause a simple incorrect estimate)

Using the wrong method for calculating the penalty

Using a safe harbor to evaluate whether tax needed to actually file or not

Since this is such a tricky thing, you are far better off having a representative that can help you with the IRS when attempting to request penalty abatement for this type of tax penalty. Even if you think that you have proved your case it is still up to the agent assigned to your case to decide if they want to accept your side.

Accuracy-related Penalty

It is always the responsibility of the taxpayer to be sure that all of the information that is contained on the tax return that they file is 100% accurate. Even if you have a competent person who you hired to fill out your tax return you still are totally responsible for the complete accuracy of all of the information that is contained on the filed tax return.

In accordance with the IRC or Internal Revenue Code, the IRS is authorized to penalize a taxpayer for inaccuracies if there is misconduct based on negligence and a substantial understatement of tax. These two things frequently are found during audits and can trigger serious penalties and even criminal investigations.

There are several things that can prevent the IRS from assessing accuracy penalties and all of them are spelled out in the IRC. In order to be sure that you have a case to request abatement for this type of penalty, you want to be sure that you have a tax professional on your side.  

In the end

While you the right to make a request of the IRS when it comes to Tax Penalty Relief – Penalty Abatement, it is extremely important that you have all of your facts straight and that you have hired a tax defense company to help you with your request for the abatement. There are a lot of details that need to be addressed and any failure to have everything ready could result in a negative outcome.

Call us for a free and confidential evaluation at 1-888-498-2937.