Penalty Abatement
In addition to the Offer in Compromise, there is another, very effective program for reduction of an outstanding tax debt, the IRS Penalty Abatement program. This tax penalty abatement program can really help people who, normally through no fault of their own, were hit with tax penalties and interest. If a penalty abatement request is approved, you can stand to save quite a bit of money. It is often the case that tax penalties can equal close to 25% of the original tax debt.
What Is The IRS Penalty Abatement Program? Will It Provide Tax Penalty Abatement Relief?
The IRS Penalty Abatement program provides for the "forgiveness" of tax penalties and associated interest related to overdue tax debt. If there were circumstances beyond your control that prevented you from paying your tax debt that led to delinquency, we can challenge the penalties and interest that have built up and negotiate them down using the tax penalty abatement program. Penalty abatement relief falls into four separate categories. They are:
- Reasonable Cause - Mistake made by the taxpayer, ignorance of law, death, serious illness, unavoidable absence
- Statutory Exceptions - Simple or complex legislative tax code changes
- Administrative Waivers - Undue hardship, fire, flood, natural disaster, bad legal/tax advice
- Correction of Service Error - Mistake made by the IRS. Source IRS
Of these four, reasonable cause is the most commonly used relief when requesting abatement penalty relief. The IRS's definition is "[r]easonable cause relief is granted when the taxpayer exercises ordinary business care and prudence in determining their tax obligations but is unable to comply with those obligations."
Can I Qualify For IRS Penalty Abatement?
Because abatement penalty relief from accrued penalties and interest is based more on stated representations rather than financial hardship, terms for a successful tax penalty abatement are very specific. More so than any other, the IRS penalty abatement program involves a great deal of legal knowledge and skill to successfully navigate the IRS protocol and bring forth a resolution. If a penalty abatement is applied for correctly and effectively, results are substantial; savings are usually thousands of dollars for the average taxpayer. At KEL Attorneys, our staff of tax professionals have years of experience and know the secrets of the abatement penalty relief program. When you call, your personal tax strategist will cover the intricate details of an IRS penalty abatement, accurately explaining why you would or wouldn't be a candidate for tax penalty abatement.
What Should I Know?
To begin with, if you apply for penalty abatement relief, you will need a good reason for doing so. If you were ill and unable to work for a large portion of the tax year (and, can prove it!), you may have a good basis for requesting a tax penalty abatement. If you experienced a personal disaster, such as the 2005 Katrina hurricane, an IRS penalty abatement may be granted. If you were incarcerated for a large portion of the year or received unsound tax advice from your tax professional, the IRS may consider a tax penalty abatement. Whatever reason you have for requesting a penalty abatement, you will need to be prepared to produce documentation that will substantiate your reason for petitioning for an IRS penalty abatement.
Something else you should know about the IRS penalty abatement program is that once you apply for tax penalty abatement relief using a specific reason and the request is denied, you cannot use those grounds again for that particular tax year. Because of this, it is very important that you present the strongest case possible for IRS penalty abatement relief when you apply.
What If I Need To Request An IRS Penalty Abatement For More Than One Year?
If you need to petition for tax penalty abatement for more than one year, you will need to apply for abatement penalty relief separately for each year. This means you will need to provide a valid and documented reason for each year you are requesting a penalty abatement.
How Should I Go About Requesting A Tax Penalty Abatement?
If you feel you will be applying for a tax penalty abatement, it would be wise to seek legal counsel that is familiar and an expert in tax law, specifically in the area of IRS penalty abatement. Tax law is very complex and requires a sizable amount of knowledge in order to be successful. The legal tax team at KEL Attorneys has studied all of the necessary and numerous codes related to tax law and can assist in your application for a penalty abatement.
One thing you should consider when choosing a legal firm to represent you in your tax penalty abatement matter is the length of time the law firm has been practicing tax law. KEL Attorneys has been serving its tax clients for over a decade. We have hand-picked our tax team in order to provide you with the very best there is to offer!
KEL Attorneys prides itself on being up-to-date on current tax law cases and revisions to the tax code. In fact, we are often contacted by news media to provide legal opinions on current legal issues. We have given legal opinions to ABC News, NBC News, Fox News, Fox Business, and CNBC, as well as other media outlets.
We would also like to note that every Thursday evening at 6 p.m. EST, our managing partner, Matt Englett, Esq., hosts a radio show which addresses legal matters. This radio show is called "Under Oath" and may be found at am540 (WFLA).