Owing money to the IRS is always stressful, and the penalties and interest that they apply can compound your problems, literally.
While these added costs are meant to encourage people to pay on time, they can also have a snowball effect. As back tax debts become bigger, they make it more difficult for the filer to catch up and stay current on upcoming tax obligations.
Recognizing that some people are experiencing hardship — and that all filers may deserve a break now and then — the IRS offers the option to “abate,” or avoid, certain penalties. By applying for an IRS penalty abatement, you can have the penalties removed, along with any associated interest.
Penalty relief is only available under certain circumstances, but many filers are unaware that it exists at all. Working with experienced tax professionals, like those at Instant Tax Solutions, can help you explore your options for penalty abatement, as well as any other forms of relief available.
Our tax experts are standing by to assist you. We can help you file an IRS penalty abatement request and look for any other opportunity to reduce or eliminate the amount you owe.
Learn more about the options you have at your disposal during a free consultation and accounts review. Schedule your free review today when you call (888) 363-8958 or contact us online.
Get Help From Experienced Portland Penalty Abatement Services
Receiving IRS penalty relief is rarely a straightforward proposition. You must first understand what forms of relief you qualify for, and then you must follow the processes the IRS provides down to the letter.
In many cases, you will be asked to present evidence justifying your request, such as if it is related to a mistake on the IRS’ part or a claim of special circumstances.
Instant Tax Solutions has helped thousands of individuals and businesses across multiple states get the tax relief they needed in order to get back on top of their finances. Our IRS penalty abatement services are available to provide assistance with working through all of the options you have to reduce the amount you owe.
When you choose to work with us, you can expect to dive deeply into your finances and into all IRS programs and forms of relief available. In many cases, we are able to chip away at the final amount you face, using techniques like penalty abatement, offer in compromise, or appeal of IRS decisions.
We may also be able to help you revise your previously filed returns if we discover that doing so could lead to a lower tax assessment. Amended returns can be filed within three years of their initial due date.
Even in cases where we were unable to find a way to reduce your tax burden significantly, we can still help you settle upon the repayment option that makes the most sense for you — whether that’s beginning an installment agreement or asking the IRS to pause their collection efforts because the debt is “Currently Not Collectible.” We have helped thousands of our clients by negotiating with the IRS directly, too, meaning you don’t have to worry about certain interactions or stressful conversations.
Reach out to us for any tax questions you have, especially when it comes to finding penalty relief. We are here to assist you and put you back in full control of your financial situation.
Main Types of IRS Penalty Abatement Options Available
When the IRS grants a penalty abatement, it effectively strikes off all effects of that penalty from the time it began to the current moment, including all associated interest. That does not, however, mean that you have the amount you owe eliminated, nor is it no longer considered past due.
If you continue to not pay the amount owed, the IRS can begin applying penalties against your balance once more. You are also expected to comply with all other deadlines, including if you have a payment plan.
The IRS provides four main categories of abatement request:
- First-time abate
- Other administrative waiver
- Statutory exemption
- Reasonable cause
A first-time abate is one of the most common forms of penalty relief. However, it is only available for those who qualify.
In order to qualify for a first-time abate, you must meet the following criteria:
- You filed the same type of return associated with the penalties as expected for the past three years
- You did not receive any penalties during the previous three years, not including penalties that were removed for reasons other than a first-time abate request
Additionally, a first-time abate can only apply to the following types of penalties:
- Failure to file
- Failure to pay
- Failure to deposit
Other Administrative Waiver
A first-time abate penalty removal is a form of administrative waiver, i.e., it’s part of a special program offered by the IRS that acknowledges that the penalty was legitimate but that you met special criteria in order to receive relief.
Other administrative waivers exist, as well. Instant Tax Solutions can review your situation to determine if any temporary or specialized programs apply, giving you the chance to apply for a different administrative waiver other than a first-time abate.
A statutory exemption applies when statutory language specifically allows you to have a penalty removed under the specific circumstances named in the statute. Examples of situations where a statutory exemption may apply include:
- You received guidance or advice from the IRS that was made in error, and that was the exclusive reason behind the circumstances in which the penalty was applied
- You mailed your return on time, but the IRS may not have received it, or it otherwise erroneously considered the return/payment late
- You are a U.S. military service member or another type of personnel involved in operations in an active combat zone
- You live in a federal disaster area that was declared before or near the time in which the return should have been filed (or other action you should have taken that would have resulted in a penalty not being levied)
Instant Tax Solutions can look through our information to determine if other types of statutes and exemptions could apply to your unique situation.
A penalty abatement for a “reasonable cause” may apply in situations where you do not qualify under the terms of first-time abate, other administrative waiver, or a statutory exemption.
In most cases, you must have thought that you did nothing in error in order for your reasonable cause to be accepted. Or, you must have had some circumstances that legitimately prevented you from submitting the required form/payment, such as:
- Unable to access records
- A death, serious illness, or unavoidable absence that affects the taxpayer or their family in such a way as to make it impossible to avoid the penalty
- Errors or issues with IRS or banking systems, which were outside the filer’s control
Note that reasonable cause abatement requests cannot apply to penalties levied in response to estimated taxes.
How to File a Portland IRS Penalty Abatement Request
First, you must determine the program or reason for which you are requesting the penalty abatement. Then, you must fill out the appropriate application or forms in order to make the request.
The IRS is likely to expect justification for your abatement request, as well as proof of the assertions you have made. For example, in cases of statutory exemption or reasonable cause, they will expect you to state the exact reasons, cite any applicable laws or policies, and provide proof of your inability to file on time and avoid payment.
You may also be expected to provide justification for your request, especially in cases of reasonable cause.
One bit of good news is that the IRS automatically considers you for first-time abate and reasonable cause at the same time, regardless of whether you submit a relief request for one or the other. At the same time, you can increase your chances of having your abatement granted by fully understanding the reasons under which you are applying and providing all of the needed proof and logical reasoning.
This exact type of situation is where Instant Tax Solutions can come in. We regularly help filers request penalty removal, and we are highly familiar with the IRS’ processes and the types of documentation and justification they expect when considering approval.
We can help you avoid a denial of your request, and even if we are unable to secure penalty relief for you, we can review your situation to consider all other forms of possible relief.
Appealing a Penalty Abatement Denial
If your request for penalty abatement was denied, you may have one last chance to get your penalties removed. Most applicants have the opportunity to file an appeal of the decision.
Note that the appeal cannot provide any new information or justification for the abatement request. Instead, it must seek to prove that the IRS made its decision in error or otherwise failed to apply the proper procedure when considering the request.
Get Help Reducing the Amount of Back Taxes You Owe
Millions of people in the U.S. file taxes late each year or face penalties for some other reason. What they may not know is that they could have opportunities to reduce the amount they owe, avoid penalties, and resolve their tax debt with a lower impact on their finances than expected.
Instant Tax Solutions is here to help you get the relief you need. Our tax professionals do everything we can to reduce the amount you owe, set up a payment or lump sum plan to help you get current on tax payments, and prepare for years ahead with a plan to start submitting taxes and full payments on time.
We make it our highest priority to help you find relief — not just tax relief, but the relief you feel deep inside your heart when you no longer have to worry about taxes.
Find out why we have been trusted by so many across multiple states when you reach out at (888) 363-8958 or contact us online to schedule a free case review and tax account review.