IRS Abatement — How You May Get Tax Penalties Waived

Is a portion of your old tax debt in the form of penalties and interest? If so, you may be able to find some resolution by seeking abatement of some or all of these penalties. How can you do this? Here's how it works. 

When Can Penalties Be Abated?

Even though it has a hard-hitting reputation, the IRS allows leeway on some rules when the situation warrants it. Penalties may fall into this category depending on the circumstances that cause the taxpayer to be late or fail to pay. If a taxpayer can prove that there were extenuating circumstances in their particular case, they may win approval to waive some fees — and reduce their overall tax bill. 

Who Decides on Abatement?

Fortunately for taxpayers, abatement is decided on a case-by-case basis by a real person rather than a computer. The taxpayer submits the designated form (sometimes Form 843 and sometimes the first-time penalty abatement waiver) to the IRS. An agent is assigned to review each request and look over any documentation to support the taxpayer's case, resulting in a decision. 

How Can You Build a Case for Abatement?

Cases for abatement generally fall into two categories. The first is when some external situation outside your control caused the late payment. This may range from natural disasters or the destruction of your records to civil unrest in your area that made it impossible to file or pay your tax.  

The second common cause is a personal issue that made filing personally impossible for you. For instance, this might include a death in the immediate family, domestic abuse situation, or even financial actions taken by a spouse or partner. While these traumatic events may not have made it physically impossible to pay what was due, they are often a reason for leniency. 

Where Can You Get Help?

Seeking abatement can be difficult. First, you must know and properly complete the IRS forms involved. Failure to submit the right form will delay abatement and may even prevent it from being granted in time to help you. Then, you must show a good cause and back up your assertions with convincing documentation. Because each case is unique, there is no "cut and dry" abatement request. 

The best way to ensure that you achieve abatement and relief from your penalties or interest is to work with a tax professional. They can help you navigate the forms involved and put forth a good argument for a waiver. Learn more about abatement and other tax resolution options by making an appointment with a tax service in your state today. 

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