Taxpayers who are unable to pay their Federal taxes within the stipulated timeline are subjected to various penalties that can have serious consequences if they are not dealt with in the right manner. IRS penalties may entail forfeiture of property or even jail time. If you have received an IRS penalty, speak with one our IRS penalty abatement attorneys, immediately. We, at the Steburg Law Firm, are committed to helping individuals and businesses find their way out of all sorts of IRS tax debt-related troubles.
Penalties Eligible for Relief
Late Payment Penalties
The first penalty a taxpayer can receive is when they file their taxes on time, but fail to pay the total amount due. In such cases, taxpayers are usually charged with a 0.5% interest on the taxes they owe to the IRS.
Minimum Late Filing Penalty
If you file your return more than 60 days after the due date or extended due date, the minimum penalty for late filing is the smaller of $135 or 100 percent of the unpaid tax. The failure-to-pay penalty is generally 0.5 percent per month of your unpaid taxes.
Late Filing Penalties
Another penalty that taxpayers are subjected to is when they fail to file their tax returns on time. Delaying in filing your taxes will result in late filing penalty amounts to 5% of your unpaid tax every month that it goes unpaid. That amount will accrue for up to 5 months, capping the penalty at 25% of the unpaid amount.
IRS Penalty Abatement Provisions
First Time Abatement
The First Time Penalty Abatement penalty waiver allows a non-compliant first-time taxpayer to request abatement of specific penalties for that tax period. An FTA waiver can request abatement in two circumstances, including: failure-to-pay and failure-to-file penalties. Taxpayers may qualify for an administrative relief for their penalties if they:
- Do not have any penalties for the previous 3 years
- Have fully-paid their dues
- Have filled all returns
Reasonable Cause, as the name suggests, is based on all circumstances and facts that establish a just reason why a taxpayer was unable to pay or file their taxes within the deadline. Before attempting to resolve an IRS penalty, make sure that the information in the notice received is accurate and correct. If the notice contains resolvable issues, there is a possibility of penalty abatement. The reasonable causes include inability to obtain tax records, natural disasters, serious illness, or the death of a family member.
If the notice received has any incorrect information, the recipient may qualify for statutory exception. When requesting for penalty relief, taxpayers need to have three documents that includes the written advice given by the IRS, tax adjustment report (if any) that identifies the penalty, and your request for advice. The Claim for Refund and Request for Abatement (Form 843) must be filed to request a penalty relief in such circumstances.
Applying for IRS penalty abatement can be a daunting task, and professional help ensures your greatest success of having your penalties abated. Steburg Law Firm’s team of professional tax attorney’s can plead your case before the IRS and help you reach the best solution possible. Allow our qualified professionals to help with the IRS and guide you through a process which can otherwise be an overwhelming ordeal. Contact us today to see how we can help resolve your case and learn how feasible financial freedom can be.