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Penalty Abatement

Penalty Abatement

If you have yet to file your taxes on time or have paid them late, you might face significant and frustrating penalties. However, an experienced tax attorney can sometimes persuade the IRS to reduce or eliminate these penalties through penalty abatement. Such attorneys have a track record of successfully negotiating penalty abatement for eligible taxpayers in the U.S. They can assess if your situation qualifies for penalty abatement and strive to achieve a fair and legal resolution to your tax issues.

To qualify for a penalty abatement, taxpayers must fulfill certain requirements and offer a reasonable explanation for any late or nonexistent tax payments. This involves submitting proof to the IRS to demonstrate that their circumstances warrant relief from penalties. Acceptable reasons for penalty abatement under current IRS guidelines include:

  • Depending on advice from a tax advisor
  • Not knowing the tax laws
  • Personal or family medical issues
  • Natural disasters
  • Severe financial hardship
  • A family member's death
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Penalties Are Always Inevitable
Only Major Errors Qualify for Abatement
You Must Pay Penalties Immediately
IRS Rarely Grants Abatement
Professional Help Isn't Necessary

Penalties Are Always Inevitable

Myth

Tax penalties are unavoidable once assessed.

Fact

Penalty abatement can reduce or eliminate tax penalties.

Only Major Errors Qualify for Abatement

Myth

Only major tax errors qualify for penalty abatement.

Fact

Minor errors and reasonable causes can also be grounds for abatement.

You Must Pay Penalties Immediately

Myth

Tax penalties must be paid immediately and in full.

Fact

Penalty abatement can provide relief and prevent immediate payment.

IRS Rarely Grants Abatement

Myth

The IRS rarely approves penalty abatement requests.

Fact

With proper documentation and reasons, penalty abatement is often granted.

Professional Help Isn't Necessary

Myth

You don't need professional assistance for penalty abatement.

Fact

Professional guidance can significantly increase the chances of successful abatement.

Adult Day Care Coverage

Risk Factors

You may have to pay them for their services from your pocket if you hire a caregiver.

Solution

Policies may cover community care, which usually means adult day care, so you don’t need to pay them all by yourself.

Modifications to House Coverage

Risk Factors

You may need to build a wheelchair ramp for one of your family members because of their medical conditions.

Solution

Some policies may even pay benefits to family members who act as caregivers or cover home modifications, such as adding wheelchair ramps or installing safety devices.
Consultation

Additionally, taxpayers who are first-time offenders can apply for first-time penalty abatement (FTA). This applies to certain penalties for a single tax period and could save taxpayers a significant amount. Individuals can request an FTA for not filing or not paying on time, and businesses can request it for not filing payroll taxes on time. The IRS requires that the taxpayer must have filed any late taxes or filed a valid extension to qualify, and they must not have had any penalties in the past three years. If the IRS determines that the taxpayer has complied with payment rules, they may grant the request and lessen the penalties.

For assistance in navigating the penalty abatement process, consider consulting a tax attorney to explore your options and potentially save on penalties.

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