Understanding Reasonable Cause for IRS Penalty and Interest Abatement

IRS Penalty Abatement with The Law Offices of Nick Nemeth

The IRS tax penalty abatement is a provision that allows taxpayers to remove late payment penalties and interests imposed by the IRS for unpaid taxes and delayed tax reporting and payment. If you have unfiled or unpaid tax debts and have a “reasonable cause” for the noncompliance, you can apply for penalty abatement relief. The abatement, however, does not reduce the actual tax amount; it only removes the penalties or interest charged by the IRS. Continuing on the subject, this blog covers all you need to know about IRS penalty and interest abatement. Read on.

What is IRS Penalty Abatement?

IRS penalty abatement is a provision that relieves taxpayers from having to pay the penalties and interest charged by the federal body, provided they have a “just” reason for not filing or paying taxes in time. Taxpayers are eligible for IRS penalty abatement only if the situation or circumstance that lead to unpaid or unfiled taxes was out of their control. A penalty abatement depends on the facts, circumstances, and ability of a taxpayer to provide sufficient proof to support that claim.

Possible “Just” Causes

  • Natural Disaster
  • Fire or Casualty
  • Records Cannot Be Obtained
  • Serious Illness, Incapacitation, or Death
  • Civil Disturbance
  • Received Incorrect Advice from a Tax Professional
  • Unavoidable Absence
  • Hostage Situation

Information Needed by the IRS

  • Documentation supporting the claim of experiencing a circumstance or situation that made it impossible for the taxpayer to file or pay taxes.
  • In case of serious illness, incapacitation, or death of the taxpayer or a family member, the IRS will need documentation to support the claim. Hospital records or a letter from the doctor is enough proof to claim an IRS penalty abatement.

Wrap Up

Now that you know the basics of an IRS penalty abatement and the eligibility criteria, speak with an experienced IRS tax attorney at The Law Offices of Nick Nemeth to find your way out of an IRS penalty or interest.  We have a team of experienced IRS tax lawyers with proven expertise in dealing with all types of IRS tax-related issues, especially penalty and interest abatement. For a confidential, no-obligation consultation, fill out our contact form or simply call (972) 627-4580.