Abatement of Penalties & Interest with The Law Offices of Nick Nemeth
  • June 26, 2018
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Contrary to common belief, an IRS penalty is not a problem that you cannot overcome. The IRS, in certain scenarios, may withdraw a penalty if the defendant is able to prove that they cannot pay their tax liabilities due any of the reasonable causes prequalified by the federal body. To decide whether a cause is “reasonable” for penalty abatement, the IRS usually takes into account four factors; the reason(s), tax payment compliance history, time taken by the defendant to become compliant, and the circumstances given for late filing or nonpayment of taxes. In this blog post, we discuss three scenarios the IRS considers “reasonable causes” for IRS penalty abatement.

1.Death or Serious Illness

The IRS considers a serious medical condition, illness, or death in the family to be a reasonable cause for penalty abatement. When it comes to dealing with an IRS penalty, this cause is “reasonable” for both individual and corporate taxpayers, as well as their family members. It is, however, important to have the documentation to support the cause. When filing an abatement request, the applicant must include any evidence that may elaborate the significance of the situation. If a loved one has been unwell, due to which you could not file or pay taxes, you also need to give details of your relationship with the person.

2.Unavailability of Records

Although the inability to keep records showcases a lack of responsibility, a taxpayer may qualify for abatement of penalties and interest if they were unable to find the documents necessary to honor their tax commitments. The IRS, however, also looks at the reasonability of the failure of maintaining tax records and whether the mentioned records were under the taxpayers control. Tax filing has to be accurate, and therefore, unavailability of records is another reasonable cause the IRS may consider to abate a tax penalty.

3.Miscellaneous Reasons

There are a number of other reasons that the IRS may consider to abate tax penalties,  the IRS just has to regard it as a reasonable cause. A few such reasons include ignorance of the law, natural disasters, and wrong advice from a tax advisor or the IRS. If you commit an error while filing or paying taxes, the IRS may consider it as a reasonable cause and choose to abate the tax penalties and interests under your name. It is important to note that lack of funds is not a reasonable cause considered by the IRS, but the reason behind your financial situation may meet the criteria of a reasonable cause.

Wrap Up

In an unmanageable situation where you cannot pay or file their taxes in time, the IRS will help you out. However, abatement of penalties and interests is only considered by the IRS if the reasons given by a taxpayer has detailed documentation and evidence to prove their situation. If you need legal guidance, look no further than The Law Offices of Nick Nemeth. For over 18 years, our team of IRS lawyers and tax professionals has been committed to helping individuals overcome all sorts of IRS tax-related issues, like IRS penalties. To schedule a no-obligation consultation, write to us at info@myIRSteam.com or fill our contact form. Alternatively, simply call (972) 426-2553.

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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.
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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