Penalties incurred from filing taxes late are not only frustrating but costly for many U.S. taxpayers. The IRS will sometimes agree to an abatement of penalties resulting from late filing a tax return, tax deposit or other tax payment, but most taxpayers are unaware of this provision.
First-time non-compliant taxpayers can request penalty abatement (FTA). This request applies to some kinds of penalties in a single tax period but could end up saving some taxpayers considerable money in penalty fees. Individuals can request a FTA for failure to file or failure to pay penalties and businesses can also request a FTA for failing to file payroll taxes. Of course, the IRS does not forgive these penalties easily and each case must meet certain criteria. In order to qualify, the taxpayer must file their late taxes or have filed a valid extension. They also must have a three-year clean penalty history. If the IRS concludes that the taxpayer has demonstrated payment compliance, they may accept the request and abate the late-filing penalties.
Taxpayers may also qualify for a penalty waiver or abatement under other provisions, including reasonable cause, statutory exceptions, administrative waivers, and correction of an IRS error.
Before filing for penalty abatement you'll need to be sure you qualify and are able to communicate a convincing argument to the IRS. For assistance, turn to Tom Rex, CPA. I understand what types of situations will qualify a taxpayer for penalty abatement and can help you file the necessary paperwork. To learn more or discuss your circumstances, contact me at 520-433-9291 or request a consultation through my website.