Whether it’s a first time IRS penalty abatement or a request for reasonable cause relief, the process can be time-consuming, stressful and overwhelming.
There are options available to you that our tax attorneys can guide you through to get the penalty relief you need.
Relief from IRS Penalties
It is easy to become buried in IRS penalties for simple and honest mistakes. When you run out of time to file your taxes or don’t have the money to pay your taxes, the IRS attaches high percentage penalties for non-compliance. However, our tax attorneys can help you get relief from the seemingly never ending pile of bills.
What is a Penalty Abatement?
Abatement is the process of removing penalties after the IRS has evaluated your situation. There are different types of penalties, but the most common are Failure to File (FTF) and Failure to Pay (FTP). Each type of penalty requires a different procedure to request relief.
The IRS offers two ways to abate penalties:
- First-time Penalty Abatement Relief (FTA): A one-time only waiver available to taxpayers in good standing with at least three years of compliant tax history.
- Reasonable Cause Relief (RC): The IRS will allow penalty abatement when the taxpayer can demonstrate that they tried to file or pay on time, but were not able to comply due to unforeseen circumstances outside of their control.
Do You Qualify for IRS Penalty Abatement?
Penalty relief is available, but only if you qualify by providing proof that you were unable to comply due to circumstances beyond your control.
The abatement process can take two to three months for the initial evaluation. If an appeal is made, it can take an additional six to twelve months.
What are Reasonable Causes?
Abatement is only granted for reasonable cause, which is based on all the facts and circumstances unique to your situation.
The IRS will consider any reason that proves you tried to comply with federal tax obligations, but were unable to do so. Reasonable cause includes, but is not limited to:
- Fire, casualty, natural disaster or other disturbances
- Inability to obtain records
- Mistake made
- Death, serious illness or unavoidable absence
- Extreme hardship
- Mistaken advice
First Time IRS Penalty Abatement
The IRS offers a first-time abatement (FTA) waiver if you have at least a 3-year history of compliance. Filing for an FTA will get you relief from penalties for late filing or payment.
You may qualify for relief from penalties under the FTA if you:
- Have no penalties for the 3 tax years prior
- Filed all required returns or filed an extension of time to file
- Paid, or arranged to pay, any tax due
The FTA is the easiest of all penalty relief options, but it only removes penalties from one tax period.
Increase Your Chances for Penalty Abatement
Increase your chances of penalty abatement by following some best practices:
- Communicate Reasonable Cause Relief in writing
- Be clear when describing circumstances outside of your control
- Demonstrate how other situations in your life were affected by the reasonable cause
- Provide proof of events for the time period of non-compliance
- Follow up with the IRS on abatement requests
The tax attorneys at Wiggam Law can help you organize and frame your request to get relief from your penalties. We know the proper procedures and are able to negotiate with the IRS for approval of your request for penalty or tax forgiveness.
Success Stories
$29,570 Saved
The taxpayers owed for tax years 2014-2016 and the IRS had filed Federal Tax Liens against their real estate. We assisted the taxpayers with removing the liens from their property so it could sell. Additionally, we negotiated a penalty abatement with the IRS, which resulted in the taxpayers receiving a refund over $29,570 after the closing.
$359,078 Saved
Our client was suffering after their former employee embezzled the company’s payroll funds. Between the IRS and Georgia, our client owed a substantial amount. Our Penalty Abatement Requests saved our client $359,078 across their combined federal and state liabilities.
$18,101 Saved
When the client came to our firm, she owed over $17,842 to the IRS based in part on incorrect tax returns her husband filed jointly on her behalf. Her account was already actively in collections. We filed an innocent spouse request with the IRS, keeping her protected from any collection enforcement and successfully argued that the IRS should not attempt to collect this debt from her. The IRS ultimately agreed with our arguments and completely abated her tax liability, saving her over $17,842 in taxes. Additionally, we negotiated a penalty abatement with the Georgia Department of Revenue saving additional taxes of $259.
Contact Our Tax Attorneys in Atlanta, GA
IRS penalties can add up and eventually become overwhelming and stressful. Our expert tax attorneys have the knowledge and experience to represent your fight for penalty abatement.