One of the goals we have when we represent a taxpayer before the IRS is to have their IRS tax penalties removed or reduced. It is possible to have IRS tax penalties reduced or removed, and the IRS has published guidance in its regulations for its own employees to follow about tax penalty abatement. You should know what these regulations say about tax penalty abatement.
HAVING A REASONABLE CAUSE
First, the IRS representatives want to know the taxpayer’s reason and that reason should show a reasonable cause.
The IRS representatives also want to know that the taxpayer had a history of compliance with the IRS before the incidents that caused a penalty to be imposed. If the taxpayer has a history of the same penalty in previous years, the IRS agent could be skeptical that there is a reasonable cause.
IRS agents are told to consider first-time reasonable causes for penalty abatement, but a first-time reasonable cause does not mean penalties will be reduced or eliminated.
IRS agents will also consider whether the event that caused a penalty to be imposed was an event that was out of their control. A death, or serious illness, or a widespread problem such as Covid pandemic shutdowns and a job loss could be events that could lead to penalties that could be reduced or eliminated.
The IRS recently issued an order for removing the Failure To File Penalty for 2019 and 2020 tax returns if those tax returns were actually filed by September 30, 2022.
DEATH OR SERIOUS ILLNESS
The IRS regulations that its agents follow specifically mentions death, serious illness, or unavoidable absence as reasons that should be taken under consideration for removing or reducing penalties.
For individuals, the IRS instructs its representatives to consider penalty abatement with this paragraph:
“If there was a death, serious illness, or unavoidable absence of the taxpayer or a death or serious illness in the taxpayer’s immediate family (i.e., spouse, sibling, parents, grandparents, children).”
Death or serious illness can also be expanded as a reason for reducing penalties if the taxpayer had the sole authority or file a tax return, make payments or make deposits for corporations, estates, and trusts and other legal entitles.
CAN YOU PRESENT YOUR CASE TO THE IRS BY YOURSELF?
Can you present your case for reducing IRS tax penalties to the IRS by yourself? Yes, you can. The IRS regulations give you the right to do it. But the IRS regulations also allow you to have a representative to present your case to the IRS. We can discuss that with you when you call us for a free telephone consultation.
In many cases, taxpayers with a problem with the IRS can handle their own issues. But there comes a time and a cost when you might be better off with expert representation. We can discuss those options with you.
There are payment plans with the IRS that are very appropriate for taxpayers who owe smaller amounts of money to the IRS. But if your tax debt is high, or if your financial situation has changed so you can’t handle a tax debt on your own, our free telephone consultation can include information about seeking an IRS Fresh Start Program or an IRS Offer In Compromise program. And yes, we’ll also include having IRS tax penalties removed or reduced.
The video below gives you an idea about what we will discuss with you when you call us for a free telephone consultation. There are all sorts of things to discuss besides having your IRS penalties removed or reduced and that IRS Fresh Start Program and the IRS Offer In Compromise Program. You might also qualify for Innocent Spouse Protection. Watch this video and then give us a call.
Here again is the direct phone number to call our senior tax resolution specialist Tom at our office: 949-359-0810
Or, you can call our general number on this page to reach any of our tax resolution experts about having IRS tax penalties removed or reduced and the IRS Fresh Start Initiative or the IRS Offer In Compromise, and for guidance if you are facing an IRS audit or think you might be facing an audit.
And remember, you don’t have to go through an IRS tax audit alone.