To request an elimination (abatement, forgiveness) or reduction of IRS penalties, you’ll need to prepare a Form 843, called Claim for Refund and Request for Abatement and submit it to the IRS. The form requires that you indicate, among other things, the type of penalty that you’re asking to be abated by identifying the actual law for which the penalty applies.
Two examples of penalties laws which are often used are:
- Internal Revenue Code section 6651(a)(1) Failure to File Tax Return
- Internal Revenue Code section 6651(a)(2) Failure to Pay Tax when Due
The Form 843 requires that you explain the reasons why you’re asking for penalty abatement.
Those reasons include, but aren’t limited to the following examples:
- Written or verbal advice from the IRS
- Advice from a tax advisor
- Correction of an IRS error
- Fire, casualty, natural disaster or other disturbance
Some tax penalties can also be forgiven or reduced if you have a reasonable cause for not complying and can show that you exercised ordinary business care and prudence. To get an abatement of penalties due to reasonable cause, you must have an excuse or reason that indicates you had no control over the situation. For example, you were unable to file your tax return in a timely because due to illness, accident or injury.
We strongly recommend that you don’t attempt to request penalty abatement on your own. IRS penalty abatement review procedures are very strict. A single wrong word or statement will be cause for automatic denial of your request.
The IRS threatens to impose heavy penalties as a deterrent for taxpayers who file and/or pay tax returns late. The IRS wants taxpayers to fear them and their threat of huge penalties.
You have a right to request abatement of tax penalties, but it’s important to know that the IRS doesn’t easily agree to reduce or eliminate penalties against anyone.
Beware of inexperienced or unprofessional tax firms who promise you that they will definitely get your penalty abatement approved. No one can guarantee that the IRS will approve your request to abate penalties. Approval or denial is solely in the hands of the IRS, and their decision can take months.
However, if the IRS does deny your request for penalty abatement, you have a right to request an appeal of that decision with IRS Appeals Division. The appeals process requires a separate request and meetings with an IRS Appeals employee. Because of our former IRS experience, including our work in the IRS Appeals Division, we can defend you in Appeals if the IRS does reject your request for penalty abatement.
Hiring AAA Tax & Accounting to prepare your pentalty abatement request will give you a distinct advantage over doing it yourself or having a less qualified firm helping you. We know the tax laws and use your personal circumstances to put together the best penalty abatement request possible. There are strict IRS guidelines that must be followed when dealing with the IRS and filing for penalty abatements. Filing an abatement request too early or late in the resolution process can result in its rejection. AAA Tax & Accounting has the experience that enables us to successfully get though the mine field known as the penalty abatement claim procedure.
Don’t contact the IRS first. It is in your best interest to contact AAA Tax & Accounting to discuss your unique situation. Your circumstances may fall into a category, not mentioned here, that will still allow us to help you. Penalties can accrue and grow larger each day. The faster you call us, the faster we can help you by taking the necessary steps to get these penalties eliminated or reduced, and getting you back on track.
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We offer all of the following services:
- Federal Tax Lien Release
- Wage & Bank Account Levy Release
- Personal (In-Business) Offer in Compromise
- Corporate Shutdown
- Tax Debt Financing Assistance
- Penalty Abatement (Forgiveness)
- State Tax Liability Assistance
- Currently Not-Collectible
- Innocent Spouse Relief
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