The IRS charging you a penalty? Did you file your tax return late? Did you not pay your federal income tax on time? Did you fail to pay your taxes at all? If you answered 'yes' to any or all of these questions, then do not be surprised if the IRS is charging you a penalty. The Internal Revenue Code Section 6694 allows the IRS to charge penalties for taking unreasonable positions, reckless conduct, and/or willful conduct.
When the IRS charges a penalty, what options are available? Taxpayers can request and receive penalty abatement or removal of penalties under conditions. Consulting with an Enrolled Agent, (EA) is wise to help you navigate through the process of obtaining penalty abatement.
What are the types of Penalty Abatement?
First-Time Penalty Abatement (FTA): Available to taxpayers who have a clean compliance history for the past three years and have not previously requested penalty abatement
Reasonable Cause Abatement: If you can demonstrate that your failure to comply was due to circumstances beyond your control, such as natural disasters, serious illness, or other significant life events.
Administrative Waivers: Sometimes, the IRS provides administrative relief for specific groups of taxpayers or under certain conditions.
A tax professional like Marcelino Dodge, EA, CTRC, can review your tax records and review your eligibility for a specific type of penalty abatement. After this review, the gathering of documents is required to help with the preparation of the necessary forms for submission to the IRS. Your request is then submitted to the IRS.
You will need to follow-up on the request after a reasonable period of time. Patience is important as the IRS can take a while to process the request.
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