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It is unfortunately too easy to fall behind on tax payments, resulting in a debt owed to the IRS. Though owing the debt itself is extremely stressful, the stress can become even more unbearable when tax penalties are applied to the debt. Fortunately, there are options to help you overcome the debt and any penalties placed on it. A Ponte Vedra penalty abatement attorney can examine your situation and determine what routes you may be able to take for relief.
The attorneys at TaxSmith, LLC, understand how overwhelming an IRS debt can feel, especially when penalties and interest begin to compound as well. We can look over the circumstances surrounding your debt and find avenues to settle it. With decades of experience, our knowledgeable team can provide you with the individualized legal advice necessary to successfully move on from your tax liabilities.
The IRS requires that you file and pay your taxes fully and accurately each year and can levy penalties if you fail to meet your tax obligations. The IRS can charge penalties for numerous reasons, including:
In addition, the IRS will also charge interest on any penalties they charge. The interest will continue to accrue until the penalty is paid in full or it has been removed.
One option to have the penalty removed or reduced is through a penalty abatement. The IRS will generally grant a penalty abatement when the taxpayer has exercised ordinary care and prudence but fails to comply with their obligations. You can request a penalty abatement if the reason why the penalty was placed was due to reasonable causes. The request can apply to one or multiple years, depending on the reasonable cause.
Penalty abatements can be difficult to acquire, and their approval hinges on the reasonable cause that you claim in the request. There are several reasonable cause factors codified by the Internal Revenue Manual that can be used as a basis for a taxpayer to challenge their tax penalty. Two frequently accepted circumstances are:
This penalty abatement factor is used when the taxpayer or a family member is experiencing a serious illness or has died. It also applies when the person solely responsible for a company’s tax obligations is absent.
A person will be reviewing the tax abatement request, so there is nothing wrong with asking for sympathy and understanding. A penalty abatement attorney in Ponte Vedra can assist with ensuring that your request is phrased correctly to adequately convey the situation you are experiencing.
The letter that gets sent to the IRS when you request the removal of a penalty must be legible and clearly explain your circumstances. Items that must be included in the letter are:
An example would be if you filed your taxes past the deadline due to a flood damaging your records. The letter should include the date of the flood and any other relevant information, such as the efforts put in to recover the required documents. Documents that should be included are any correspondence showing requests for copies of tax documents.
Once the letter is received, the IRS will review all the aspects of your case, including the effort you made to comply with any rules and regulations pertaining to your taxes or debt. Also considered will be your history of filing and paying your taxes on time.
Having an experienced Ponte Vedra penalty abatement lawyer work with you while writing this letter is one way to ensure that the letter includes all pertinent information and proof. They have experience with the format of letters that can result in abatement approval from the IRS, so they can structure your letter similarly.
A: There is no way to know for certain the outcome of your abatement request until the IRS returns with their answer. However, you can improve your odds of success by ensuring that your reason for not fulfilling your tax obligations aligns with a factor codified by the Internal Revenue Manual. You should also include all supporting information in your request. A penalty abatement attorney can help you with this process.
A: Ultimately, not getting a penalty from the IRS starts with following all your tax obligations correctly and completely. This, however, is not always possible, and circumstances can arise that result in a debt owed to the IRS. When this happens, communicating with the IRS and applying for a payment plan can help prevent or reduce any penalties from the IRS.
A: The IRS will send a notice or letter by mail if you have been charged a penalty for not meeting your tax obligations. The notice or letter will inform you of the penalty, why the charge was given, and what you should do next. If you can resolve the issue that has caused the penalty, the penalty may not apply.
A: If you fail to fully and correctly file your taxes for a single year, you can be charged penalties. However, failure to file multiple years’ worth of taxes can result in the accrual of severe penalties and even criminal charges. Criminal charges are most often given when the taxpayer has willingly failed to file their taxes and also avoided opportunities to fix the tax debt.
Once you have decided to attempt a penalty abatement, reach out to the experienced TaxSmith, LLC, team to see how we can help you succeed.
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