A penalty abatement is a request made to the IRS to either terminate or reduce a tax penalty. Such an abatement is applicable only if you have made an effort to comply with the IRS in the past but couldn’t pay due to circumstances beyond your control. A penalty abatement is commonly requested in cases such as when you want to reverse penalties for failing to file or pay taxes. Continuing on the topic, in this blog post, we answer some commonly asked questions about IRS penalty abatement. Take a look.
What is a reasonable cause letter for IRS penalty abatement?
A reasonable cause letter requests the IRS to either consider reducing or refund of penalties on a tax account. The reason to consider reducing the penalties must be valid such as a natural disaster and health problem. ‘Reasonable cause’ doesn’t apply to all penalties and must meet the criteria specified by the IRS.
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What is first-time penalty abatement?
First-time penalty abatement provides relief from penalties for failing to file, pay, or deposit certain taxes. This relief is exercised by the IRS if the taxpayer shows a clean record of tax payments in the past and no penalties for the past 3 tax years from the year of receiving a penalty. Also, taxpayers who have filed the necessary returns or requested an extension of time to file but have failed to pay, or have only paid a small number of their tax dues are eligible for first-time penalty abatement.
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Which form is used to request a penalty abatement?
The IRS Form 843 is used when requesting an abatement or refund of penalties. Known as the “Claim for Refund and Request for Abatement” form, it is generally used to request for a refund of taxes, abatement of FUTA or a few more excise taxes, and to request for abatement or refund of the interest, penalties, or additions.
Requesting IRS penalty abatement requires you to carefully present your case and clearly express why you qualify for an abatement. Filing a penalty abatement requests understanding of the situation, planning, and flawless paperwork to get the most favorable outcome. When faced with tax debt problems and looking for IRS penalty abatement in Dallas, reach out to our team of experienced IRS tax attorneys in Dallas/Fort Worth, Texas. For a no-obligation consultation, simply call (972) 484-0829 or fill out our contact form and we will take it from there.