Penalty Abatement

In many tax debt cases the Penalty and Interest portion of the tax debt is quite significant. If you are facing penalties for not filing or paying your taxes on time, you may be able to get those penalties removed (or even get past penalties and interest refunded) through through penalty abatement or penalty adjustment. Abatement refers to eliminating an assessed tax liability and an adjustment references reducing or altering an assessed tax liability.

If there is a ‘reasonable cause’ for abatement or adjustment, the IRS may be willing to review the penalties which created a tax liability. Reasonable cause can include:

  • Mailing the tax return or payment on time but writing the wrong address on the envelope; using the wrong amount of postage
  • A death or illness in the family
  • An error caused by an IRS employee
  • The destruction of records by a fire, flood or other catastrophe

About one-third of tax penalties are eventually removed by the IRS through successful tax resolution. To request that a tax penalty be removed or refunded you need to fill out IRS Form 843. This form of tax resolution is called a “Claim for Refund and Request for Abatement.”

We can work with you to make payment arrangements that the IRS will allow. If there were circumstances beyond your control that prevented you from paying your tax debt and led to delinquency, we are able to challenge the penalties and interest that have built up. Relief from penalties falls into four separate categories: Reasonable Cause, Statutory Exceptions, Administrative Waivers, and Correction in Service Error.

Penalty Abatement can be the best solution in resolving IRS Tax Debt, and we can help you determine if this may an option for you.

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