Penalty Abatement

In a lot of tax debt cases, the Penalty and Interest portion of the tax debt is substantial and can often make up a good portion of the total tax liability.

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If you have been assessed penalties for failing to file or pay your taxes timely, you may be able to get those penalties erased, or even get past penalties and interest refunded, through penalty abatement or penalty adjustment.

Penalty abatement means completely removing an imposed tax liability, while penalty adjustment reduces an imposed tax liability. If there is a reasonable cause for abatement or adjustment, the IRS may be willing to reconsider the penalties in question. Reasonable cause can consist of:

  • Fire, flood, natural disaster, or other disturbances
  • Death or serious illness of the taxpayer or the taxpayer’s immediately family
  • Error by an IRS employee or inability to obtain records when requested
  • Mailing the tax return or payment on time but including the incorrect address on the envelope or incorrect amount of postage

Nearly a third of assessed tax penalties demonstrate reasonable cause and are ultimately eliminated by the IRS through successful tax resolution. To request the removal or refund of a tax penalty, you’ll need to fill out IRS Form 843, Claim for Refund and Request for Abatement.

If you are unable to remove or reduce penalties, we can work with you to negotiate payment arrangements that the IRS will accept. If there were events out of your control that hindered you from paying your tax debt, we are able to challenge the penalties and interest that have accumulated over time.

Penalty Abatement may be the best option for you to resolve or reduce your IRS tax debt. If you don’t want to attempt this process alone, don’t worry, we’re here to help. Our team of trusted tax professionals will help you determine if penalty abatement or penalty adjustment is a good option for you.

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