Remove IRS Penalties

Has the IRS assessed penalties against you or your business? Are they substantial? In many cases, IRS penalties can be abated—“abate” simply means to remove. Our Dallas tax attorneys regularly help clients reduce or eliminate IRS penalties, along with the interest that accrues on them. Penalties often make up a large share of a tax bill, so removing them can dramatically reduce what you owe.

Which IRS Penalties Can Be Removed?

The first question is the type of penalty. Not every penalty can be removed, but the most common ones can—including the failure-to-file penalty, the failure-to-pay penalty, the failure-to-deposit penalty (for payroll deposits), and the accuracy-related penalty. The type of penalty also affects how it must be challenged. A civil fraud penalty, for instance, generally has to be addressed through a written abatement request or a refund claim rather than the usual channels.

Because penalties accrue interest, removing a penalty also removes the interest charged on it. On older or larger balances, that combined relief can be significant.

First-Time Penalty Abatement

First-time abatement is an administrative form of relief the IRS offers to taxpayers with a clean recent history. If you have filed and paid on time for the prior three years and are otherwise current, the IRS will often remove a first-time failure-to-file, failure-to-pay, or failure-to-deposit penalty. It is one of the most reliable forms of relief, but it has to be requested correctly and is generally available only once, so it should be used strategically.

Reasonable-Cause Relief

The IRS can abate penalties when you show that you exercised ordinary business care and prudence but still could not comply because of circumstances beyond your control. Common grounds include serious illness or incapacity, a death in the immediate family, natural disasters or other events that destroyed records, an inability to obtain records, and reasonable reliance on a tax professional. Reasonable-cause relief is fact-specific, and the strength of the request depends on how well the facts are documented and presented. We build the record—dates, documentation, and a clear explanation tied to the legal standard—to give the request the best chance of success.

How We Help

We start by identifying which penalties you have been assessed and which relief options actually fit your situation. Then we prepare and submit the strongest possible request—whether that is a first-time abatement, a reasonable-cause request, or a refund claim—and we handle the correspondence and any follow-up with the IRS. If the IRS denies relief that you are entitled to, we can pursue it through appeals or a refund claim.

If the IRS has assessed penalties against you or your business, call our Dallas tax attorneys at (469) 895-5141 to schedule an appointment and find out whether your penalties can be removed.