IRS Settlement | Common Reasons for Penalty Abatement
Posted by Dean Alexander on Tue, Aug 10, 2010
In trying to reach an IRS settlement, will they consider abatement of penalty? The answer is yes. Then the next question is:would they consider abatement of interest? The answer is generally no. There will be instances of abatement of interest as in the case of an erroneous IRS advice that caused some interest during a specific period or unnecessary delay that caused you to pay extra interest that otherwise you would not have to pay. Make a long story short, penalty can be abated, interest let us just say no.
When you seek tax relief from penalties here are some common reasons you may cite to request an abatement of penalty:
1) You have called the IRS and they told you something wrong that caused you to pay penalty. It would be nice if you have a name and badge number of an IRS employee. Remembering the date will go a long way in solving the tax problem when it relates to conversations with the IRS, especially if you don’t have a name and badge number. What you are hoping for is that they may verify your call through their records.
2) Relying on your bookkeeper's advice. You can obtain IRS tax relief to your tax problem if you relied on the wrong advice of your CPA, tax attorney or an enrolled agent. If the facts support your claim, that may go a long way for the IRS settlement that you are seeking.
3) There is tax relief from penalty if an act of nature caused you not to be able to file or comply with the law. This may be easier to prove because those acts are well publicized.
4) If you could not, for some reason, obtain your books of original entries or any documents that gives you an opportunity to seek IRS tax help, there may be a tax relief to settle the IRS problem with regards to penalty abatement.
5) You may be able to get IRS tax relief by abatement of penalty if you realized you were aware of your tax liability but it was financially very difficult to pay such liability. The tax help in this regard would be in getting tax relief from delinquency tax penalties.
6) Your prior history of compliance will make IRS tax help much easier. The IRS is willing to offer you tax relief from penalty if your prior history shows that you have always been in compliance.
7) If you were sick or physically impaired, the IRS may be willing to offer you tax relief by abatement of penalty. Tax settlement will be much easier if in any of these cases you can support your claim.