Colorado Springs: The IRS is Charging Me a Penalty. How Can I Get the Penalty Abated?

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?

1. 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

2. 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.

3. 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.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

 

Colorado Springs Video: My Request for Penalty Abatement was Denied, What Options Do I Have?

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: My Request for Penalty Abatement was Denied, What Options Do I Have?

 

When a request for abatement of penalties is submitted, many times you will get the response that your explanation does not meet the reasonable cause standard.  If you have received such a denial, do not despair.  There is normally a period of time (30 to 60 days) you have to appeal the initial decision.  This leaves the question: How can I win on appeal?

To start you need to hire competent tax professional such as Marcelino Dodge, EA to  represent.   With a proper review of your facts and circumstances, we can determine if you qualify for First Time Abatement or if a more detailed appeal is needed.  On a more detailed appeal we will need all the information and documentation as to why you feel the penalties should be abate.  A clear, concise letter of explanation can then be prepared and submitted with the documentation establishing your case to the IRS appeals office for review.  The strong case we present the easier we make it for the IRS to approve the penalty abatement.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Colorado Springs: I Filed Late and Have a Penalty, How Can I Get the Penalty Abated?

 

For years you have made estimated tax payments, filed your tax return, and paid your taxes on time.  But, as happens to so many people you have an unexpected event that contributes to you missing the April 15 filing deadline and missed making your tax payment on time.  You also failed to file an extension.  Whether you file and pay in one month or 6 months, you are likely to be assessed under Internal Revenue Code section 6651 a Failure to File Penalty and Failure to Pay Penalty.

In general to have penalties abated the IRS requires you provide an explanation of reasonable cause.  What "reasonable cause" is can be challenging to prove to the IRS.  For this discussion though the reasonable cause argument will not be needed.  How can you get penalty relief?  The Internal Revenue Manuel (IRM) has an administrative relief provision if you meet qualifying criteria.  This relief is know as First Time Abatement.

Marcelino Dodge, EA helps taxpayers to first see if they qualify and if so, then to take advantage of this administrative relief.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com