Owing debt to the government is terrifying. You may feel like your entire future is in doubt, especially if the back tax debt is a surprise and you have no idea how you are going to pay up. Whether you deliberately claimed some things you should not have claimed, you miss a filing date, or make any other errors on your return, the IRS may hit you with heavy fines, penalties, and interest that can quickly create an unmanageable burden.
The good news is that often, you may be able to significantly reduce what you owe by seeking abatement for these fees and penalties. Seeking this relief, however, requires knowledge of the tax system, an understanding of the burden of proof, and the ability to negotiate with the IRS on these issues. That’s where Instant Tax Solutions excels.
We have one goal and one purpose — to help people like you seek the tax relief they need to get back on their feet and regain control of their finances. We can help you build a case and represent your interests to request IRS penalty abatement and reduce the financial burden you face.
If you are ready to learn about forms of tax relief for which you might qualify, contact our Houston tax relief lawyers at (888) 921-3781 or through our online portal to schedule your free, no-obligation case review today.
Why Seek Houston Penalty Abatement Services?
While the process to apply for penalty abatement is easy, the burden of proof to argue that you deserve it can be quite complex. You will need to demonstrate that you have acted and continue to act I good faith to pay your burden and establish good standing with the agency. The detailed understanding of agency policies and financial records can require specialized knowledge.
At Instant Tax Solutions, we have over 15 years of experience working to give you the best shot at getting your request granted. We will go through your finances with you from top to bottom, seeking out all the available options for tax relief, and help you to make the right decision for your needs. We will also make a plan of action, put together your application, and help you stick to it so you can get back on your financial feet.
You may be in this situation for the first time, but rest assured you are not alone. We have helped tens of thousands of people like you over the years to get the freedom from tax burden they need. We are ready to stand by your side, build your case, and represent your interests as a dedicated, determined partner.
Sometimes, we can even reduce the amount of tax you actually owe and significantly reduce your debt. In the very best cases, our clients have seen their debt wiped out. While this does not apply to everyone, you never know until we review your accounts. It all starts with asking for help from our experienced tax relief team of CPAs, tax lawyers, and other professionals.
What Penalties Can Be Abated?
Only certain kinds of fees and penalties can be forgiven, removed, or otherwise abated. To qualify for abatement, your tax penalties must be one or more of the following:
- Dishonored checks
- Failure to deposit
- Accuracy related
- Information return
- Failure to file
- Failure to pay
- Underpayment of your estimated tax
- Other penalties on a case-by-case basis
Most commonly, penalties related to failure to file or pay are those that see abatement.
Can I Seek Interest Waivers?
This is one of the most common questions tax professionals hear, and the answer is no, you cannot simply request that the IRS remove interest while keeping penalties and fees. The agency is disallowed by law to remove interest only.
That said, if you successfully apply to have penalties and fees abated, the interest associated with those penalties and fees will also automatically be waived. This means that removing those penalties can often significantly reduce the back tax burden you owe to the IRS.
There is a single exception to this rule. If the interest in question was charged based on a penalty you had no reason to know existed, or if the interest was caused by the IRS making an error, the interest may be removed. In all other cases, you must remove the penalty to remove the interest.
How to File an IRS Penalty Abatement Request
Again, the process for filing an IRS penalty abatement request is relatively simple. When you receive notification from the IRS of your back taxes and the penalties associated, the notice will contain information about your next steps. In some cases, you can call a toll-free number listed on your notice to request abatement over the phone. The IRS will let you know at that time if your penalty is abated. You will need to have on hand:
- The letter or notice
- The penalty to be abated
- Your rationale for having the penalty removed
If they do not remove the penalty during the phone call, you can fill out Form 843: Claim for Refund and Request for Abatement to make your request in writing.
Are You Eligible for IRS Penalty Abatement?
Before making your request, however, it is important to determine whether you are eligible for the abatement. Several types of penalty abatement exist, and each carries its own requirements. These forms of penalty relief include:
- First-time abate
- Reasonable cause abate
- Statutory exceptions
- Other administrative waivers
Knowing which type of abate you seek can vastly improve your chances of success. If you are not certain, Instant Tax Solutions may be able to help you determine which is right for you.
First-Time Abate
Among the most common forms of penalty abatement is the first-time abate. This means that you are a filer who is in good standing with the IRS and has never faced this sort of issue before. You must be up to date on tax returns, which you filed on time for the prior three years. You must not have any penalties to those returns unless those penalties were removed for a reason other than the first-time abate.
Only failure to file, failure to pay, and failure to deposit penalties may be waived in this way. The IRS, after you file your request, will consider your circumstances, filing and payment history, and other relevant information.
Reasonable Cause Abatement
The reasonable cause abatement means that you had a good and valid reason for not paying your taxes when they were due. This abatement is granted at the sole discretion of the IRS, and you must provide a very good reason and evidence to back it up. For example, if you thought you had issued the payment, but for some reason, the payment never went through and you didn’t realize it, that is a valid reason.
Other reasonable causes include being the victim of a natural disaster, lack of access to records, or sometimes being a member of the military on deployment. As with other forms of abatement, the IRS will look at your tax history, and consider whether they feel you did everything reasonable to make your payment on time.
Applying for reasonable cause abatement can be tricky and requires deep knowledge of how the IRS thinks and works. Instant Tax Solutions can help you determine if you qualify.
Statutory Exceptions
Statutory exceptions refer to situations where you got bad advice or guidance from the IRS itself. This is a very difficult exception to get approved. Other versions include when you mailed the return on time, and it did not arrive, you were located in a federal disaster area, or you are engaged in active military operations in a combat zone as a military member.
Other Administrative Waiver Types
Other types of administrative waivers exist that cover many different situations. Such waivers may be issued as the result of new changes in the tax code, specific relief programs, or individual circumstances. If you do not meet one of the other forms of tax abatement, Instant Tax Solutions may be able to work with you to find a different type of administrative waiver or another option for tax relief that may work.
What if My Request Was Denied?
If you apply for a penalty waiver and your request is denied, you are not alone. Thousands of people like you face denials from the IRS every year. You do have options, but you will need experienced help. It is imperative that you act fast. You have only 30 days after your denial to file your appeal. Instant Tax Solutions can go over your finances with you, gather the evidence, formulate a plan of action, and improve your chances of appealing and winning your tax penalty abatement.
Other Options for Tax Relief
If you cannot qualify for a penalty abatement, other options for tax relief may exist. You may, for example, be able to work out a payment plan negotiate for an offer in compromise to pay less, file an amended return to get access to credits and deductions you did not claim earlier, or many other options. We can help you determine the best avenue forward for your financial situation.
Seek Help with IRS Penalty Abatement Services
Instant Tax Solutions is here to provide you relief from tax burdens and relief from stress. We can work with you not only to settle your past tax debt, but to make a solid plan for the future so once you are solvent, you stay that way. Let us help to bring you the relief you need. Call today for a free case review at (888) 921-3781 or reach out online to schedule an appointment.
