Why do you so few American taxpayers with delinquent income tax debts know about the new First-Time Penalty Abatement Program and the value of IRS Penalty Abatement? Under the new First-Time Penalty Abatement Program that has been designed to help financially distressed Americans in a tough economy, if a taxpayer has been tax compliant for the past three years, the IRS will okay a one-time waiver of the late payment and late filing fees. But taxpayers have to directly request this relief so why hasn’t the new First-Time Penalty Abatement Program been more widely publicized? Although the Internal Revenue Service promises to publicize the program in the future, the time to take action if you have a delinquent tax bill is today. Please call the Tax Resolution Institute at (800) 401-5926 for a free consultation to see if the new First-Time Penalty Abatement Program or Penalty Abatement in general makes sense for you.
IRS First-Time Penalty Abatement Program
Including and beyond the First-Time Penalty Abatement Program, when you present a case for removing the penalties and interest assessed against a back tax debt, the IRS will often abate the penalties. It is essential to have the penalty abatement process handled by experienced CPAs and Tax Attorneys like the Tax Experts at the Tax Resolution Institute.
Penalty Abatement is the process of eliminating or reducing penalties assessed up by the IRS. For most penalties, a standard called “reasonable cause” is what is required to accomplish penalty abatement. Reasonable cause means that despite “the exercise of ordinary business care and prudence,” a taxpayer was caught in a specific situation in which they could not file their tax return, or pay their taxes on time.
Unlike most other claims for debt relief, the penalty abatement process puts a human face on your case. By transforming you from a statistic to a person, penalty abatement can work in your best interest. Success in the process can relieve you of some or all of the penalty fees you have incurred if you can explain adequately your failure to pay the back tax debt.
IRS guidelines generously suggest that abatement should be “generally granted when the taxpayer exercises ordinary business care and prudence” in trying to pay their taxes. In other words, did you make efforts to fix the problem? When taxes were due, did the taxpayer promptly notify the IRS of a problem and pay what was practical? Your best proof is documentation. The Tax Resolution Institute tries to establish what went wrong on paper through correspondences and notices.
IRS Reasons For Granting Penalty Abatement
Although individual circumstances remain quite important, there are some instances in which abatement may be granted:
1. Were you or your business the victim of crime (especially embezzlement)
2. Did a natural disaster damage your ability to make money to pay taxes?
3. Were you financial records destroyed or stolen through no neglect on your own part?
4. Did you experience family problems that you can prove, such as a divorce, a serious illness or the death of a close family member?
5. Did you receive bad advice or did a so-called tax expert scam you?
6. Did the IRS made a mistake in the processing of your claim or did the IRS give you bad advice on how to file your taxes?
No matter how well you state your case, the IRS appeals officer assigned to your abatement request will have some hard questions. With the Tax Resolution Institute by your side, the answers to these questions will be prepared and ready to go. Even if we are successful with the penalty abatement process, we will only be able to eliminate part or all of your penalties and interest. Still, eliminating the penalties and interest can lift a huge financial burden off of you.
If you want to know more about the First-Time Penalty Abatement Program or Penalty Abatement across the board, please call the Tax Resolution Institute at (800) 401-5926 for a free consultation. It is essential to consult with a tax expert to see if this tax resolution strategy makes sense for you.
About Peter Y. Stephan
Peter Y. Stephan, executive director of the Tax Resolution Institute, has been helping people resolve large, complex payroll tax problems and personal income tax problems for over 25 years. Peter has written a book "The Ultimate Tax Resolution Guide" and speaks on Tax Resolution topics frequently.