About IRS Penalty Abatement
  • January 30, 2023
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Federal tax penalties are one of the most widely used tools deployed by the IRS on taxpayers that fail to file/pay their tax returns. According to the IRS, FY 2021 observed a massive $37.3 billion collected in civil penalties. Federal tax penalties can be problematic for taxpayers as they accumulate interest over time, aggravating the situation with the potential to push taxpayers towards bankruptcy. An IRS tax attorney can help you request an IRS tax penalty waiver or penalty abatement to reclaim your financial health. Continuing on the topic, read on as we discuss the ins and outs of IRS penalty abatement.

Types of federal penalties

Three of the common tax penalties imposed by the IRS are:
  • Failure to File: It is imposed when the taxpayer fails to file tax returns on time. It is charged at 0.5% of the amount owed per month, with a maximum of 25% of the total outstanding amount.
  • Failure to Pay: This tax penalty is imposed when taxpayers fail to pay their taxes on time. It is charged 5% of the amount owed per month, with a maximum of 25% of the total amount due.
  • Failure to Deposit Penalty: This penalty is imposed on enterprises that fail to pay their employment taxes on time or incorrectly.
“Failure to file” comprises 56% of all federal tax penalties imposed under the Internal Revenue Code by the IRS. The best way for taxpayers to deal with penalties is to opt for penalty abatement or an IRS tax penalty waiver. An experienced IRS tax attorney that can help you determine your eligibility and present your case to the IRS with relevant documents.

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Eligibility for IRS penalty abatement

When it comes to filing for an IRS tax penalty waiver or first time penalty abatement waiver, the eligibility can be different depending on the cause that triggered a penalty. These include:

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  • Reasonable Cause: The IRS determines reasonable cause on a “case-by-case” basis after considering all the circumstances and facts of the situation, however, there’s an exception – Estimated Tax Penalty.
  • Failure to File/Pay Penalties: One of the most crucial tax penalties, failure to file/pay requires the taxpayers to present justifiable causes that resulted in missing filing and payments on time. These include disturbances caused due to natural calamities, death/medical deterioration/unavoidable absence of an immediate family member, and technical issues in the system resulting in delays in filing or payment by electronic means.

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An IRS tax penalty abatement request is only accepted if the aforementioned causes are justified by proper proof (documents), however, dealing with such complex legalities can be overwhelming. That’s why it is always preferable to consult an IRS tax firm to help you request IRS penalty abatement.

Final Word

The IRS imposes a penalty and informs the taxpayer by sending an email or letter encompassing information about “how much”, “why”, and “what to do next”. It is important for taxpayers to verify the information in the email/letter and respond accordingly. A federal tax attorney can help you interpret/verify the notice and respond to the IRS, if required. When looking to consult a Dallas-based tax attorney, look no further than the Law Offices of Nick Nemeth. We are a trusted federal tax firm in Dallas, Fort Worth that has experience helping taxpayers with solutions for a range of tax problems, including getting an IRS tax penalty waiver. To discuss your requirements, call (972) 426-2553. Alternatively, you can fill out our contact form.
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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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