If you owe taxes to the IRS, chances are you also have some penalties and interest attached to that tax liability. The IRS can penalize taxpayers for things like failure-to-file or failure-to-pay. Those penalties sit on top of your tax balance and can accumulate more interest and increase the taxes you owe. The IRS fortunately allows a first-time abatement for qualifying taxpayers. Most taxpayers don’t know about the first-time abatement (FTA) penalty wavier or how it can help them lower their tax balance.
At Polston Tax, we are experienced in helping our clients prepare tax returns and resolve tax debts. With our tax resolution services like penalty abatements, we can help reduce the burden of your tax liability.
About 74% of all penalties assessed by the IRS involved business, payroll and individual penalties for:
Failure to file: This 14% penalty applies if you failed to file your taxes before the quarterly or annual deadline.
- Failure to pay: This 56% penalty applies if you failed to pay your taxes before the annual deadline.
- Failure to deposit: This 7% penalty applies if you own a business and filed the employment taxes incorrectly or failed to pay them altogether.
Most of these penalties are assessed automatically, regardless of the taxpayer’s situation and will continue accumulating until the liability is paid in full. If you are assessed with penalties from the IRS, there are a few things you must do to qualify for the FTA penalty waiver and get IRS penalty relief.
A tax attorney at Polston Tax can help determine what penalties apply in your situation and work with you to come up with a solution.
What Is a Penalty Abatement?
When you qualify for a penalty abatement, you will receive a waiver for a penalty that you incurred from the IRS due to unpaid taxes. Failure to make a payment, file your taxes on time or a tax filing errors can all lead to penalties. These are all common issues among taxpayers, and you may find yourself facing a penalty from the IRS as a result. Fortunately, if you can get a penalty abatement, your penalty will be waived.
Qualifying for and receiving a penalty abatement is easiest when you have an experienced tax attorney from Polston Tax on your side. Let us know what your tax situation is and we’ll come up with a tax resolution together!
How to Qualify for an IRS Penalty Abatement
To qualify, you must be in compliance with your tax returns and your payments to the IRS. To meet the filing compliance requirement, you must have filed or filed an extension for all required returns and have no outstanding request from the IRS. This means if you need to file a certain year’s tax return, you must file it before you can request a penalty abatement.
To make sure you are in compliance with your payments, you must have paid or arranged to pay any tax due. You can be approved for an installment agreement and also submit a request for a penalty abatement if your payments are current. And lastly, to qualify you must have a clean penalty history. This means you cannot be eligible for a penalty abatement if you had any penalties for the previous three tax years.
Reach out to one of our tax attorneys at Polston Tax so we can help you determine whether you might qualify for an IRS penalty abatement.
How to Request an Abatement of Penalties From the IRS
Typically, you can choose from one of two methods to request penalty relief:
- You can file a penalty abatement after the IRS has assessed a penalty. You typically do this by writing a penalty abatement letter, calling the IRS or using a tax professional like Polston Tax.
- After you have paid the penalty, you can request a refund through Form 843. You must file the claim within three years of the return due date, or within two years after the date, you paid the penalty.
You may need supporting documents when you request a penalty abatement, such as:
- Death certificate: If you are claiming a family member’s death led to your inability to file on time, you will need a copy of the death certificate.
- Doctor’s notes: If you are claiming a serious illness led to your inability to file on time, you will need a copy of your doctor’s notes.
- Insurance claims: If you are claiming a natural disaster, fire or theft led to your inability to file on time, you will need a copy of your related insurance claim.
Make sure to submit copies of your documentation to the IRS and not the original documents. If you want to verbally request a penalty relief, it’s best if you get in touch with the closest IRS office and request a meeting. It is important to know that if your penalty abatement request is denied by the IRS, you can’t use the same reason to apply again.
Contact Polston Tax to Abate IRS Penalties
A penalty abatement can provide some relief when you’re facing back taxes. For many taxpayers who incur penalties, these are a result of unintentional infractions caused by financial constraints or incorrect advice. When your liability spans several years, you may want to use a penalty abatement on your largest penalty. Hire an experienced tax professional at Polston Tax to help you get the penalty abatement you need.
If you’re unsure whether you qualify for a penalty relief or you need help filing a waiver, Polston Tax can help! Our team of tax attorneys can both help you file your penalty abatement waiver and get you a resolution with the IRS so you can put your tax problems behind you! Call us today at 844-841-9857 or schedule your free consultation.