IRS Penalty Abatement
  • December 27, 2023
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The complexities of tax filing and payment often result in individuals facing daunting IRS penalties. From legal claims against your property to potential seizures, the IRS employs stringent measures to collect owed taxes, impacting your credit and creating financial hardships. Fortunately, tax relief systems, including penalty abatement, offer a path to settle IRS taxes and shield yourself from economic strain. Navigating IRS penalty abatement complexities can be challenging, necessitating professional assistance. The Law Offices of Nick Nemeth is a trusted guide in unraveling the intricacies of the IRS and its tax relief options. In this blog, we present a comprehensive guide on types of penalties eligible for relief, offering clarity for those tackling IRS tax penalties.

What is the IRS Penalty Abatement?

The IRS penalty abatement process involves the forgiveness or reduction of penalties imposed by the Internal Revenue Service (IRS) for specific tax-related infractions. These penalties may arise from actions like late filing, delayed payments, or inaccuracies in tax reporting. Importantly, IRS penalty abatement is not an automatic process. Taxpayers are required to demonstrate reasonable cause or meet specific criteria to qualify for relief. The primary goal is to offer taxpayers a fair opportunity to address their tax issues without enduring excessively punitive measures. This is especially relevant in cases where circumstances beyond their control contributed to the penalty. Equipped with the knowledge and support needed to present a compelling case for abatement, our Dallas tax attorney can help you secure a fair resolution for your tax challenges.

Repercussion of IRS Penalties

The repercussions of IRS penalties are multifaceted and can significantly impact taxpayers. The penalties, stemming from tax-related infractions like late filing, late payment, or inaccuracies in tax reporting, trigger immediate financial burdens. Beyond the immediate strain, they also have the potential for long-term consequences, affecting credit scores and financial health. Moreover, IRS charges varying interest rates based on the type of penalties, compounding the financial burden over time. Importantly, the penalties can impact your overall standing with the IRS, leading to increased scrutiny. Understanding these repercussions is crucial for taxpayers, as it allows them to proactively address and mitigate the negative effects on their financial well-being. The Law Offices of Nick Nemeth recognize the complexities associated with IRS penalties and offer experienced guidance to navigate and address these challenges. 

Types of Penalties

The IRS imposes various penalties for different tax-related infractions. Here are some common types:

  • Penalty for not Filing or Late Filing Taxes: Levied when a taxpayer fails to file their tax return by the due or extended date.
  • Penalty for not Paying Taxes: Imposed when a taxpayer doesn’t pay the full taxes owed by the due date.
  • Accuracy-Related Penalty: Applied for a substantial understatement of income tax, negligence, or disregard of tax rules.
  • Late Tax Payment Penalty: Incurred when a taxpayer pays taxes after the due date, even if the return was filed on time.
  • Underpayment Penalty: Levied when taxpayers don’t pay enough tax throughout the year.
  • Trust Fund Recovery Penalty: Imposed on individuals responsible for collecting and paying payroll taxes who willfully fail to do so.
  • Civil Fraud Penalty: Applied in cases of fraudulent underpayment of income tax involving intentional deception.
  • Failure to Deposit Penalty: Relevant for businesses that fail to deposit employment taxes on time.
  • Failure to Report Foreign Bank and Financial Accounts (FBAR) Penalty: Imposed for failing to report foreign accounts as required by the Bank Secrecy Act.

These penalties vary in severity and may have different assessment criteria. Our experienced tax attorneys provide guidance and assistance for those facing IRS penalties, helping them navigate complexities and explore potential relief avenues.

Types of Penalty Abatement

Types of penalty abatement refer to various categories or situations in which the IRS may consider granting relief from certain penalties imposed on taxpayers. The IRS offers different types of penalty abatement based on specific circumstances. Some common types include:

  • 1. First-Time Penalty Abatement (FTA): Available to taxpayers who have a clean compliance history and meet certain criteria. It’s a one-time relief option for certain penalties.
  • 2. Reasonable Cause Abatement: Granted when taxpayers can demonstrate that they had a valid reason, beyond their control, for failing to comply with tax obligations. This could include illness, natural disasters, or other unforeseen circumstances.
  • 3. Statutory Exception Abatement: Granted when a taxpayer can show that they meet specific statutory exceptions that make them eligible for penalty relief.
  • 4. Administrative Waiver and Correction: Applied in cases where the IRS acknowledges its own errors or delays that led to penalties. The IRS may waive penalties in situations such as:
    • Correction of Service Error Relief: Offered when penalties are assessed due to an error by the IRS, allowing taxpayers to request correction and relief.
    • Correction of Written Advice Relief: Granted when penalties result from incorrect written advice provided by the IRS, and the taxpayer relied on that advice in good faith.
  • 5. Undue Hardship Relief: Considered when payment of penalties would cause undue hardship to the taxpayer, taking into account their financial circumstances.

Each type of penalty abatement has its own eligibility criteria, and taxpayers must provide sufficient documentation and evidence to support their request for relief. Our experienced Dallas tax attorneys can assist taxpayers in navigating the complexities of penalty abatement, helping them determine the most appropriate type for their specific situation.

Consult with Our Experienced Tax Attorneys in Dallas

Facing IRS penalties can be overwhelming, especially when they lead to financial hardships. The Law Offices of Nick Nemeth, a leading tax resolution firm, is here to provide assistance with various IRS tax problems, including penalties. Our seasoned tax attorneys in Dallas bring a wealth of experience in securing IRS penalty abatements. By assessing your unique situation, our tax attorneys strategize the most effective approach and advocate on your behalf. Trust our experienced staff to navigate the complexities of penalty relief, ensuring the best possible outcome for your tax concerns. Prioritizing your financial well-being, our dedicated team works towards securing the penalty abatement you deserve. Our seasoned tax attorneys in Dallas diligently assist taxpayers with IRS tax challenges. For IRS tax resolution or to discuss your case with our attorneys, call (972) 426-2553 or fill out our contact form.

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What Our Clients Have to Say

Brent VahleBrent Vahle
19:13 02 May 24
I called to see if they could help reduce some penalties and fees. The person I spoke with told me it might be counterproductive for them to take my case since their feels would likely equal the amount of penalty/interest abatement. I decided to pass on moving forward but was so happy to hear a legal team, or any business for that matter, who has that much integrity. I feel most others would likely try to take my money anyway. I hope I never have to go through this again, but if I do, I will definitely use the Law Offices of Nick Nemeth!
Jason WinkleJason Winkle
18:44 02 May 24
Jaime Flores was very friendly, professional, and knowledgeable. She gave me some very valuable information which helped guide me with a plan of action. The free consultation is very much appreciated.
Matthew SwigartMatthew Swigart
12:14 02 May 24
Great attorney who was able to provide quick and useful advice. Although my situation did not warrant their services, they still took the time to discuss solutions I could explore. I highly recommend visiting this office!
Tony PantojaTony Pantoja
12:57 09 Apr 24
Very professional and very knowledgeable, Jamie Flores was very straight forward and professional, a firm that doesn’t just take your money, Thanks
Carla AtwalCarla Atwal
10:52 02 Apr 24
Nick was wonderful in guiding me with direction on some tax questions I had. He was concise, and to the point, and was happy to provide general info to me at no charge. I truly appreciate him and would highly recommend him.
Miguel AlvaradoMiguel Alvarado
15:56 25 Mar 24
By far the best attorneys I have ever worked with. They’re are very helpful and supportive from day one. They went above and beyond to make sure all my documents were submitted on time and gave updates as soon as they received them. I cannot name a single flaw in their work. Their team of assistants are very professional and seem to all be on the same page. I’ve made multiple phone calls and sent a ton of emails to their staff and they were able to help me all through the course of the case. I cannot express my gratitude enough for how excellent they handled my case.
Lucy FoyLucy Foy
06:55 19 Jan 24
My first appointment I had with, Tax Attorney Nick Nemeth, gave me such a sense of relief. He listened and gave me his professional advice, Mr Nemeth took my case. I was well kept updated, by phone calls and letters. That really impressed me and gave me so much confidence in them. The case went on for a couple of months. The day I received the call from one of his team members Kyle, informing me that the case was resolved and that I owed absolutely nothing to the IRS, I was overwhelmed with joy. I would recommend this law firm to anyone that needs help, with any tax issue. Thank you, to the Law Firm of Attorney Nick Nemeth and his team.
Bradley RunyonBradley Runyon
20:17 13 Jan 24
I received a tax bill in the mail from the IRS last year in 2023. The fees and penalties I owed were something I myself could not afford. I reached out to Nick Nemeth's firm and received the best experience you could imagine. The team was professional, educational, and fast. If you have a tax issue with the IRS using another firm other than Nick Nemeth's would be an error in judgment. I would recommend their services above others.
Sue HulsemanSue Hulseman
19:55 11 Jan 24
Working with Nick Nemeth and his team to resolve my debt with the IRS was the best decision I could have made. I felt such relief knowing I didn’t have to deal with the IRS myself. They did a wonderful job and were responsive to my questions and kept me abreast of my case. My outcome was exactly what I was hoping for. I strongly recommend using them if you have an issue to resolve with the IRS.
20:53 21 Dec 23
I had an incompetent tax preparer, who also ignored several notices from the IRS, which in the end resulted in a lien on my property. I did not know what to do and an attorney friend recommended that I contact the Nick Nemeth Law Offices. I met with Jamie Flores and Ivan Nalbantov in December 2021 for a free consultation, and right away was impressed by their thorough examination of my paperwork and extensive knowledge of IRS tax laws. I felt not pressured and appreciated their advice and in the end decided that I would pursue resolving the issue by myself. I paid the IRS Civil Penalty and, as recommended also submitted a letter to the IRS requesting a refund and explaining what happened. I am glad to report that my persistence finally paid off. My case took two years to resolve and I finally received a full abatement/refund check from the IRS in December 2023. I could not have done this without the straightforward recommendation of Jamie and Ivan; and I highly recommend the Nick Nemeth Law Offices to anyone needing help with the IRS.
Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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