Tax Abatement Policy - with Nick Nemeth
  • September 20, 2017
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Not many people know that if the IRS charges you or your business with additional penalties and interests, you can request the IRS for tax abatement. Individuals and business taxpayers can request an FTA (First-time penalty Abatement) for failure-to-file, failure-to-pay, and/or failure-to-deposit penalties for a single tax period. It is, however, important to prove a reasonable cause for the failure to compliance with the tax law.  An FTA was introduced to help first-time defaulters to have a clean compliance history. Continuing the discussion, the post provides basic knowledge to help you resolve IRS problems and get your tax penalties or interests reduced.

Penalties Covered Under FTA Policy

Individual taxpayers can request an FTA for failure to file or pay penalty. The penalty is usually 5 percent of the balance per month. Business taxpayers, on the other hand, can request an FTA for failure to file and pay as well as failure to deposit regarding payrolls taxes (for example, the deposit wasn’t made on time, deposited an incorrect amount, or not deposited in the correct manner). The penalty for failure to deposit is .5 percent of outstanding tax debt per month. In addition, an FTA also covers penalties related to audits. Accuracy related penalties are, however, not covered under FTA.

Penalty Abatement Qualification Criteria

  1. The taxpayer was not charged with any sort of penalty for the past three tax years. In case a taxpayer has received a penalty of less than $100 in any one of the previous three years, the person can still request for an FTA. It is because IRS considers penalties that are more than $100 as disqualification.
  2. The taxpayer must have filed all required returns or extensions and do not have any outstanding request from the IRS for any unfiled return. It is also required to attach all required tax returns and extensions with the IRS.
  3. The taxpayer must have paid or arranged to pay the outstanding debt. Taxpayers can also take an open installment agreement, provided they are regular with the payments.

How to Request

Taxpayers can request an FTA by telephone, in writing, or through e-services. If you are filing for abatement in writing you must attach a photocopy of the IRS notice showing the penalty and documents (stating reasonable cause) supporting your request. The request should be sent to the IRS service center where you file paper returns.

Wrapping Up

Requesting an FTA can be an overwhelming process, especially if you do not have any prior experience. It is also likely that the IRS may reject your request in the first go, mostly because of the lack of proper documentation. That is when you need guidance of an experienced IRS attorney. Schedule a free consultation with Nick Nemeth personally to learn more about relief from IRS problems and get tax penalties reduced. Simply call (972) 426-2553 or fill out our contact form and we will be happy to schedule you a free no-obligation consultation.

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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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