Spokane IRS Penalty Abatement

Applying for penalty abatement is rarely easy. In most cases, the filer will need to prove that they made a good faith effort to pay all taxes they owe, and they may also qualify for a first-time abatement, but only if they are otherwise in good standing with the IRS.

At Instant Tax Solutions, we put our 15+ years of experience to work to help maximize your chances of having an IRS penalty abatement request granted.

We help you go through each and every option you could have for relief, considering your eligibility and the best strategies for getting approval. We will then help you put together your application, along with all of the appropriate documentation and justification.

While you may have never asked for penalty relief before — or have only done so a handful of times — we have helped thousands of filers like you deal with the IRS. Our Spokane tax lawyer experts know what IRS agents look for in applications, and we can help you avoid common pitfalls, mistakes, and reasons for denial.

Not only that, but we will help you verify the actual amount you should owe. We’ll review your accounts and financials in detail and then use what we find to seek the maximum amount of relief possible.

In some cases, we can help our clients significantly reduce their tax debt — or, in some cases, eliminate it entirely.

So before you assume that you’re stuck with a tax bill you can’t possibly pay, talk with the tax professionals who can help you fully understand your options. We’ll help you stand up to the IRS and seek out all forms of relief that might be available using our knowledge, experience, and expertise.

There are multiple types of penalty abatement available:

• First-time abate
• Other administrative waiver
• Reasonable cause
• Statutory exception

First-time Abate

One of the most common methods of successful penalty abatement, a first-time abatement grants an exception to filers from certain penalties when they are otherwise in good standing.

Qualifying applicants will have filed all of their tax returns on time for the past three years, and they can’t have incurred any penalties in connection to the income listed on those returns — unless the penalties were removed for a reason other than first-time abate.

The only penalties eligible to be waived under first-time abate are:

• Failure to file
• Failure to pay
• Failure to deposit

When receiving a first-time abate request, the IRS will consider the applicant’s total circumstances, including their history of timely filing and payment in all other instances. The individual also cannot have been granted the First-Time Abate waiver in the past three years.

Other Administrative Waiver

The first-time abate is the most popular form of penalty relief by administrative waiver, but there are other types. Often, these waivers are issued in connection with rule changes or specific programs created to provide relief under specific circumstances.

For example, in 2023, the IRS issued guidelines for a new administrative waiver program that allows for relief from penalties and collections related to an accidental overpayment to an employee.

ITS will use its knowledge of the latest tax policies, along with our understanding of your unique situation, to identify all applicable administrative waivers that you might qualify for.

Reasonable Cause

A “reasonable cause” abatement is issued when the IRS feels, at its sole discretion, that the filer had a valid reason for not paying the expected taxes in full by the established deadline.

Examples of reasonable cause include a filer who thought they had issued the correct payment or self-assessed the correct tax liability but was prevented from doing so because of valid reasons. Note that lack of knowledge or funds is not a valid reason, as these are considered factors within your control.

At the same time, you may qualify if, for example, you were unable to file on time because of a natural disaster or an inability to get access to the needed records.

When weighing your request, the IRS will consider your past history of timely filing and payment. They will also examine whether you did everything you could to file on time and prevent or resolve any issues that could have arisen.

They also want to see that you identified and sought to correct any issues as soon as possible.

Applying for a reasonable cause penalty removal can require some finesse and an understanding of what the IRS looks for. Instant Tax Solutions can help you examine the totality of your tax and financial situation to build the best possible case for your penalties’ removal.

Statutory Exception

In cases where a penalty was directly caused by incorrect guidance or advice issued directly by an employee of the IRS, the filer may qualify for what is known as a statutory exception. You may also qualify for a statutory exception if you mailed your return/payment on time or were prevented from doing so because you were located in a federal disaster area.

U.S. military personnel and contractors directly involved in military operations within a combat zone may also qualify.

Only certain types of penalties qualify for IRS penalty abatement. These include penalties related to:

• Information Return
• Failure to File
• Failure to Pay
• Accuracy-Related
• Failure to Deposit
• Dishonored Check
• Underpayment of Estimated Tax by Corporations
• Underpayment of Estimated Tax by Individuals
• Other penalties as applicable

Of these, the most common penalties waived are failure to file and failure to pay.

By law, the IRS cannot waive interest for a penalty that has not been removed. On the other hand, when a penalty is removed, the interest attached to it is also automatically waived.

One of the few exceptions is if the filer was charged interest for a penalty they reasonably could not have known about or that was caused by an unreasonable error or delay on the part of the IRS. Note that, under most circumstances, the filer will still owe the amount of the penalty after receiving interest abatement.

When applying for penalty relief, the IRS is supposed to consider all common forms of penalty abatement that are available before issuing a denial. If they still happen to deny the request for relief, the document declaring the denial will contain information about appealing the decision.

Most IRS decisions have to be appealed within 30 days of issuance of a denial. Instant Tax Solutions can help you respond quickly to denials and do everything you can to maximize your chances of success through appeal.

Penalty abatement is one of the most powerful forms of tax relief. It can significantly reduce the amount you owe, making repayment easier. It can also potentially remove other consequences that can come with penalties, such as credit-worthiness evaluations for loans or mortgages. The IRS has a streamlined system to handle penalty relief requests, as well.

While all of these advantages are great, taxpayers may be seeking other forms of relief. Other common forms of tax relief include:

• Offer in compromise
• Installment agreement
• Adjusted tax assessment following a disputed tax or amended return
• Currently not collectible
• Innocent spouse relief

Instant Tax Solutions wants you to find peace of mind. Our primary goal is to reduce what you owe as much as possible while offering solutions to help you pay it off as quickly and painlessly as possible.

We’ll also work with you to prepare for taxes in the years ahead, helping you set up a system to set aside the needed money, correct errors in your W-2/W-9, and pay everything on time.

Go after the relief you need — and fight back against the pressure of the IRS — with someone knowledgeable on your side. Schedule your free consultation and accounts review today when you call our IRS penalty abatement services at (888) 886-5526 or contact us online.