• January 4, 2022
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IRS penalties can be a nightmare for taxpayers. Making the scenario worse is the fact that most penalized taxpayers either do not request relief or have their abatement request turned down because they failed to comply with the IRS’s filing guidelines. That is the reason why it is important for taxpayers to rope in an experienced IRS tax lawyer. With proven experience in handling IRS penalty abatement cases your tax attorney can help you earn a determination in your favor. In this article we cover some notable dos and don’ts when applying for IRS penalty abatement. Read on.


Utilize First-time Penalty Abatement Relief

Before considering reasonable cause abatement taxpayers should always consider that first year failure-to-file (FTF) and failure-to-pay (FTP) penalties qualify for First-time Penalty Abatement (FPA) relief, provided the taxpayer meets a few other requirements. To be eligible, you must have filed all required returns, paid all taxes due or be in an IRS agreement on the outstanding balances, and you must not have received any IRS penalties in the 3 years prior to the year the penalty was assessed against.

Related Blog Post: How to Stay Out of Jail When You Owe Back Taxes

Show Prior Compliance

IRS Policy Statement 20-1 states that the primary intent of IRS penalties is to deter noncompliance. It is therefore imperative that taxpayers who are planning to request penalty abatement are able to showcase and prove their prior year tax compliance. If a taxpayer has received any penalties in prior years, then they must have a reasonable clause for the noncompliance.

Consider Placing a Written Request

Many taxpayers call the IRS to request penalty abatement; this can work in the cases that qualify for FTA but it is not the ideal approach for reasonable cause abatements. In those cases, the taxpayer should fill out ‘Form 843: Claim for Refund’ to request penalty abatement and they should attach all available evidence that can support their reasonable cause claim.

Include All Essential Items

When preparing to request IRS penalty abatement, make sure you are clear about the circumstances that were beyond your control that caused the noncompliance. This could be an illness, incapacitation, loss of records, or other similar reasons. Make sure you attach all essential items to support your reasonable clause claim and be sure to show how other aspects of your life were affected by the situation.


Don’t Pay the Penalty

If you pay the penalty before requesting reasonable cause, it may remove an important avenue of IRS appeals: The Collection Due Process (CDP) hearing. If you have an unpaid balance, you can place a request for a CDP hearing on an unpaid penalty. During the hearing, the IRS thoroughly considers your penalty abatement request, which increases the likelihood of an abatement approval.

Related Blog Post: Worried about IRS Problems? The IRS Fresh Start Program May Help

Don’t Just Blame it on the Tax Pro

The IRS may only need one reason to grant a request for reasonable cause abatement, but the IRS can deny a request for any number of reasons. If the abatement request blames a Tax Professional as the only cause for a failure to file then your average taxpayer is unlikely to get a beneficial response from the IRS. With all the tools available to the public the ‘bad tax pro’ argument is an uphill battle. Furthermore, don’t just complain to the IRS that it will be difficult to pay. Consult with an IRS tax attorney to present the best case to the IRS that doesn’t just show but rather proves to the IRS that you really are unable to pay the penalty.

Don’t Delay, Hire an IRS Tax Attorney

While there is no time limit to request a reasonable cause abatement of the FTF or FTP penalty, waiting too long can reduce or even eliminate the benefit of doing so. If you have paid the penalty and balance due for a given year and then you request RCA, you could get a refund in the amount of the penalties abated. If you wait too long though, that check may be out of your grasp forever. If you have questions about the specifics on this then reach out to the Law Offices of Nick Nemeth as soon as you can

Wrap Up

When applying for an IRS tax penalty abatement, a taxpayer has to consider a number of factors and should be in a position to fully comply with the filing guidelines prescribed by the IRS, which calls for professional expertise. That is the reason why it is always advisable to rope in a trusted and experienced Dallas tax attorney with proven expertise in abatement of penalties and interest. If you are looking for such an expert, the search ends at the Law Offices of Nick Nemeth. Contact us today for a free, no-obligation consultation. Simply call (972) 426-2553 or fill out our contact form and we’ll get back to you as soon as possible.

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What Our Clients Have to Say

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.
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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
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Eddie WaltEddie Walt
19:44 12 Jul 22
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