IRS Penalty Tax Attorneys
Has the IRS assessed penalties? Are the penalties substantial? If so, it may be possible to get the penalties abated (the term “abate” means “to remove”).
There are a number of factors that have to be considered to determine whether it is possible to abate IRS penalties.
The first factor is the type of penalty. Not all penalties can be removed. Luckily, the most common penalties can be removed. This includes the failure to file penalty, failure to pay penalty, failure to make deposits penalty, and the accuracy-related penalty.
The type of penalty can also limit the avenues for removing the penalty. For example, a civil fraud penalty can generally only be removed by submitting a written penalty abatement request or a refund claim.
The second factor that has to be considered is your compliance history. Many penalties can be removed under the IRS’s “first time abate” policy. If this policy does not apply, then the penalty can probably only be removed due to “reasonable cause” or an IRS error. The IRS does remove penalties for these reasons.
The third factor to consider is why the penalty arose in the first place. If it was due to an understatement of tax, it may be possible to go back and find ways to lower your tax liability. The tax penalty computed using this tax would in turn be reduced, if the tax is reduced.
We are tax attorneys in Southwest Houston. We help clients remove tax penalties. If you have been assessed a penalty, we want to hear from you. Call us at (469) 895-5141 to schedule an appointment.