Penalty Abatement

Get Penalty Relief Now With Priority Tax Relief

Tax penalties can add significant financial burdens to taxpayers, often arising from late filings, underpayment, or failure to adhere to IRS regulations. However, the IRS offers a provision known as penalty abatement, which can relieve eligible taxpayers from these penalties. This article will explore what penalty abatement is, how to prevent tax penalties, and how Priority Tax Relief can assist.

What is Penalty Abatement?

Penalty abatement is a provision by the IRS that allows taxpayers to have their penalties reduced or eliminated if they meet certain criteria. The IRS recognizes that sometimes taxpayers face situations beyond their control that prevent them from complying with tax laws. There are several types of penalties that can be abated, including:

Failure-to-File Penalty: Imposed for not filing your tax return by the due date.
Failure-to-Pay Penalty: Imposed for not paying the tax owed by the due date.
Accuracy-Related Penalty: Imposed for underpayment due to negligence or substantial understatement of income tax.

Criteria for Penalty Abatement

To qualify for penalty abatement, taxpayers generally need to demonstrate reasonable cause or meet the criteria for First-Time Penalty Abatement (FTA):

Reasonable Cause: This includes circumstances such as natural disasters, serious illness, or other situations that made it impossible to comply with tax obligations. Taxpayers must provide evidence that they exercised ordinary business care and prudence but still could not meet their tax responsibilities.
First-Time Penalty Abatement (FTA): Available to taxpayers who:
- Have not been penalized in the previous three tax years.
- Have filed all required returns or filed an extension.
- Have paid, or arranged to pay, any tax due.

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How to Request Penalty Abatement

To request penalty abatement, you can:

Submit a Written Request: Write a letter to the IRS explaining the circumstances and provide supporting documentation.
Use IRS Form 843: File Form 843, “Claim for Refund and Request for Abatement,” with the IRS.
Call the IRS: In some cases, you can call the IRS and request penalty abatement over the phone.

Preventing Tax Penalties

Preventing tax penalties is the best approach to avoid the need for abatement. Here are some strategies to help you stay compliant:

Timely Filing: Always file your tax returns on time, even if you cannot pay the full amount owed. Filing an extension can give you more time to prepare your return.
Accurate Reporting: Ensure that all income, deductions, and credits are accurately reported on your tax return. Double-check for errors before filing.
Pay on Time: Pay your taxes by the due date. If you cannot pay the full amount, consider setting up a payment plan with the IRS.
Stay Informed: Keep up with changes in tax laws and regulations to ensure compliance.

How Priority Tax Relief Can Help With Penalty Abatement

Priority Tax Relief is a tax resolution service that assists taxpayers in resolving complex tax issues, including penalty abatement. Here’s how they can help:

Expert Consultation: They provide expert consultation to assess your situation and determine eligibility for penalty abatement.
Filing Assistance: Priority Tax Relief can assist in preparing and filing Form 843 or a written request for penalty abatement, ensuring all necessary information is accurately reported.
Representation: They can represent you before the IRS, handling communications and negotiations on your behalf.
Preventative Strategies: They offer guidance on how to prevent future tax penalties through proper tax planning and compliance.

Contact Priority Tax Relief at 888-708-2872 to learn more about Penalty Abatement and schedule a consultation.

Cancellation: Any cancellation of services must be made in writing and delivered to 400 S. Jefferson, Suite 100, Spokane, WA 99204 within three business days of the date of this agreement. If the client cancels services during this time, Company, reserves the right in its sole discretion to convert the agreed fee payment structure to an hourly one by which Client agrees to pay Company an hourly rate of five hundred fifty dollars an hour, entitling Client to a refund of up to fifty percent of all monies paid beyond the ten day money back guarantee in cases where no aggressive collection action is in place.

Frequently Asked Questions: Penalty Abatement

What is penalty abatement?

Penalty abatement is a provision by the IRS that allows taxpayers to have their tax penalties reduced or eliminated if they meet certain criteria. It applies to penalties such as failure-to-file, failure-to-pay, and accuracy-related penalties, among others.

What types of penalties can be abated?

The IRS can abate several types of penalties, including:

Failure-to-File Penalty: For not filing a tax return by the due date.
Failure-to-Pay Penalty: For not paying the tax owed by the due date.
Accuracy-Related Penalty: For underpayment due to negligence or substantial understatement of income tax.
Estimated Tax Penalty: For failing to pay enough tax throughout the year.

Who is eligible for penalty abatement?

Taxpayers who can demonstrate reasonable cause or meet the criteria for First-Time Penalty Abatement (FTA) are eligible. Reasonable cause includes situations such as natural disasters, serious illness, or other circumstances beyond the taxpayer’s control. FTA is available to taxpayers with a clean compliance history for the past three years.

How do I request penalty abatement?

You can request penalty abatement by:

Submitting a Written Request: Write a letter to the IRS explaining the circumstances and provide supporting documentation.
Filing Form 843: Use IRS Form 843, “Claim for Refund and Request for Abatement.”
Calling the IRS: In some cases, you can request penalty abatement over the phone by calling the IRS.

What is First-Time Penalty Abatement (FTA)?

First-Time Penalty Abatement (FTA) is a provision that allows taxpayers to have penalties waived if they have a clean compliance history for the past three years, have filed all required returns, and have paid, or arranged to pay, any tax due. It is available only once for each type of penalty.

What constitutes reasonable cause for penalty abatement?

Reasonable cause includes circumstances such as natural disasters, serious illness, death in the family, or other situations that made it impossible for the taxpayer to comply with tax obligations. Taxpayers must show they exercised ordinary business care and prudence but still could not meet their tax responsibilities.

Can penalty abatement be requested for interest charges?

Generally, penalty abatement applies only to penalties, not to interest charges. However, if the underlying penalty is abated, the related interest may also be reduced or eliminated. It is important to specify in your request if you are seeking abatement of interest related to the penalty.

How can Priority Tax Relief assist with penalty abatement?

Priority Tax Relief can assist by:

Providing Expert Consultation: Assessing your situation and determining eligibility for penalty abatement.
Filing Assistance: Preparing and filing Form 843 or a written request for penalty abatement.
Representation: Representing you before the IRS, handling communications and negotiations.
Offering Preventative Strategies: Providing guidance on how to prevent future tax penalties through proper tax planning and compliance.