You may be able to get IRS tax penalty relief simply by asking for it. If you meet the criteria for first-time penalty abatement (FTA), reasonable cause penalty relief, or other types of penalty relief, you will need to submit a request to the IRS in order to have your penalties reduced.
IRS Penalty Relief Programs
Many taxpayers are eligible for FTA, but don’t know about the program. If you don’t ask for penalty relief, you won’t receive it.
You need to meet the following criteria to receive FTA:
- You can only request penalty relief for one tax year, and you must have not penalties in the previous three tax years.
- You must not have any unfiled returns.
- You must have paid or arranged to pay any tax due. This includes agreeing to a monthly payment plan.
Reasonable cause penalty relief is another option. You can request this relief if your failure to file or pay taxes was caused by circumstances outside of your control.
Fires, natural disasters, death or serious illness of a taxpayer’s immediate family, or an inability to obtain records may all qualify for reasonable cause relief. You can request this type of relief for the failure-to-file penalty, failure-to-pay penalty, and the failure to deposit penalty.
Special Tax Penalties
Some IRS tax penalties are particularly severe, such as the penalty for the failure to file an FBAR. Willful violations can result in a penalty of $100,000 or 50% of the foreign account balance, while non-willful violations can result in a $10,000 penalty.
In these cases, the best penalty avoidance strategy is to use one of the offshore disclosure methods before the penalties are assessed. Quiet disclosures, the Streamlined Compliance Procedures, or the new Offshore Disclosure Program are all viable options, depending on your situation.
Choosing the right offshore disclosure strategy could save you a lot of money in penalties, but you can only use these programs before the IRS has started the examination or criminal investigation process.
Get Help With Tax Penalties
The IRS gives taxpayers several options for reducing or minimizing their tax penalties. Contact a tax attorney to discuss which programs may apply to your case and reduce the amount you owe the IRS.
Get help with IRS tax penalty relief by calling Ayar Law at 800-571-7175 to get free, no-obligation tax advice about your matter.\
- You may be able to get penalty relief from your taxes if you simply ask for it
- You may qualify for First Time AbatementCan only request abatement for one tax year
- Cannot have any penalties in the previous three tax years
- You must not have any unfiled returrns
- You must have paid or arranged to pay any tax due – including an installment agreement
- Reasonable Cause Penalty Relief
- You can request this if your failure to file or pay taxes was due to circumstances outside of your control
- Special tax penalties
- Some penalties are especially severe such as the penalty for the failure to file an FBAR
- Best strategy is to use one of the offshore disclosure methods before penalties are assessed
- Get help with tax penalties
- Contact a tax attorney for help with your penalties – there are plenty of viable options to reduce penalties