How Do I Apply for Tax Penalty Abatement?

 Posted on February 15, 2019 in Taxation Law

If you have been hit with a penalty by the IRS, you might believe that you have no other choice than to pay. This is an incorrect assumption, as there are numerous circumstances where the IRS may not require you to pay a penalty. In order to take advantage of this relief, you must fully comply with certain IRS procedures.

Importantly, if you believe you may be assessed a penalty, you can preemptively apply for abatement when you act quickly. Also, if you have already paid a penalty, you may still request abatement. In all cases of tax penalty abatement, time is of the essence. 

Do You Qualify for Tax Penalty Abatement?

The IRS offers penalty abatement to those who have a reasonable cause for late filing, late payment, or accuracy-related issues (negligence penalties). Reasonable causes include natural disasters and medical emergencies. If the IRS has made a mistake with regard to your return, you may also qualify for penalty abatement. Depending on your specific circumstance, you may also qualify for a one-time abatement of a penalty.

Methods for Seeking Penalty Relief

The way you request abatement will depend on where you are in the IRS penalty process. If the IRS has not yet assessed a penalty, you can prevent the penalty by submitting a penalty non-assertion request with a paper tax return. The purpose of this filing is to ask that the penalty not be automatically assigned. 

If the IRS has already assessed the penalty, you can ask for a penalty abatement retroactively. This is accomplished by contacting the IRS by phone or mail. We advise that this be done by a qualified tax lawyer on behalf of the taxpayer so that the correct and necessary information be included.

If you have already paid the penalty, Form 843 can be used to ask for abatement and a refund. This must be filed within three years of the return due date or filing date, or within two years of the date the penalty was paid. 

Contact a San Jose, CA Tax Penalty Abatement Attorney

In many cases, it is worth pursuing tax penalty abatement options with the IRS. Tax penalties can be costly, and the IRS has many effective tools to enforce the payment of these penalties.

The good news is that the IRS may determine that you are eligible to have tax penalties waived. A knowledgeable San Jose, CA tax relief lawyer can review the specifics of your situation and advise you on whether you qualify and what steps you need to take. To talk to the tax attorney at the John D. Teter Law Offices, call 408-866-1810 today.

Sources:

https://www.irs.gov/forms-pubs/about-form-843

https://www.irs.gov/businesses/small-businesses-self-employed/penalty-relief-due-to-first-time-penalty-abatement-or-other-administrative-waiver