IRS Penalty Abatement
Oftentimes, a large part of your tax bill is penalty and interest, which makes repaying your tax debt more difficult. The IRS has a legal right to charge penalties and interest; however, you have the right to request they remove or reduce those penalties.
Penalty abatement is based on a few factors, including your tax account history and if there is a reasonable cause for your late filing or late payment of the taxes. If your penalty is abated, the IRS may also reduce the interest associated with the adjusted penalty.
As an entrepreneur, you could also get civil penalties related to payroll taxes, which could also have a huge impact on your personal tax obligations – CLICK HERE to learn more about Trust Fund Recovery Penalties.
Paying penalties and interest only increases your tax obligations, causing you to pay more than you originally owed. We will work with you to determine if you qualify for the elimination or reduction of your penalties in order to make repaying your tax debt more manageable.
There are two types of penalty abatements to consider: the “first time” penalty abatement and the “reasonable cause” penalty abatement. Both of which can be considered during the tax resolution process.
Penalty abatements can either result in a reduced tax debt or a refund of previously paid penalties; therefore, it’s definitely a strategy we consider for every client.