Get IRS Penalties Removed – What You Need to Know
Penalties and interest imposed by the IRS can double or triple your federal tax liability. However, there are two primary methods taxpayers can use to get IRS penalties removed, as well as related interest.
Get IRS Penalties Removed by these penalty abatement provisions:
- First Time Abatement
- Reasonable Cause
First Time Abatement
This provision states the IRS can abate a penalty if you did not incur a penalty during any of the three preceding years of the oldest liability year.
Here’s an example: John Doe owes for 2013, 2014, and 2015. The oldest tax year is 2013. If no penalties were incurred in 2012, 2011, and 2010, the IRS can abate the penalties for 2013. The abatement is based on the First Time Abatement rule.
And, as the name suggests, it’s a one-time consideration by the IRS. Once successfully pursued by a taxpayer, is no longer an option for subsequent tax periods.
Reasonable Cause to get IRS Penalties Removed
Also, if there were circumstances outside of your control that prevented you from meeting your federal tax obligations. The period(s) in question may qualify for reasonable cause abatement. In general, there are nine main “Reasonable Cause” arguments to get penalties removed.
Additionally, here are a few examples:
- Death or serious illness in the family
- Fire, casualty, or natural disaster
- Inability to obtain records
- Undue economic hardship
Unquestionably, if you’re facing penalties or interest on your IRS liability, don’t wait to reach out. You can learn more about how to obtain a First Time Abatement, as well as get the full list of all nine Reasonable Cause examples here.