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Penalty Abatement

So what is Penalty Abatement and how does it work?

irs_penalty_abatement_programA sensible tax debt amount can become astronomical when you include IRS penalties and interest. Nevertheless, it’s possible to eliminate IRS penalties and considerably reduce the tax debt amount. If any of the circumstances triggered the tax debt, you have a case for penalty abatement and you need to contact a professional immediately:

  • Natural catastrophe
  • Tax records lost or destroyed
  • Set income (or retired)
  • Victim of theft, victim of bad financial guidance, or victim of severe health problems.

The most common IRS charge relief program used is called “Reasonable Cause”. The Internal Revenue Manual gives the following meaning. “Reasonable cause relief is generally granted when the taxpayer works out common service care and prudence in identifying their tax responsibilities but is unable to abide by those obligations.”

Essentially, that suggests something has occurred beyond your control that has actually triggered you not to submit or pay your taxes in a timely way. You also need to demonstrate that you (the taxpayer) took sensible steps to “counter” the occasions and were still unable to pay and or file prompt.

The following list is taken from the IRM or Internal Revenue Manual that provides the standards of what IRS representatives are advised to take a look at when thinking about penalty abatement:

  1. What are the events that occurred, when did it occur, and why did these occasions prevent you from adhering to the tax law?
  2. How were your other affairs dealt with throughout this time?
  3. Did the you (or does it appear) single out the IRS not to be however paid other creditors?
  4. What actions were required to try and reduce your scenarios? Normal business care and prudence is carefully taken a look at here.
  5. Exists a direct “timeline” connection in between what occurred and the taxes being file late or not paid?
  6. Is there a history of filing and or paying late? The IRS is going to take a look at your history; repeat offenders, have a harder task persuading the IRS that this was not deliberate.
  7. Were the circumstances “beyond the control of the taxpayer” genuinely inevitable, and could not be expected? If so, this normally establishes reasonable cause.

Documentation will be the bulwark of your case. Supply as much evidence of what you are arguing as possible. The “third party” proof you produce the better the chances for relief.

Our tax attorneys CPA and IRS Enrolled Agents are experts in dealing with the IRS penalty abatement. Contact the Tax Attorney Network Today and let us help you take care of all your back tax debt problems.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters, and electronic mail. Contacting us does not create an attorney-client relationship.

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