Options for Relief from Tax Penalties

Meeting tax obligations is always something you want to ensure you have covered. However, from time to time you may be among the millions of taxpayers that, due to unforeseen circumstances, may not be able to pay. This means you will likely be charged penalties on top of your tax bill. When that happens, you might have options for relief from tax penalties.

First, know that you have hope. There is a possibility that you might qualify for relief from penalties.

Second, if you received a notice stating you owe the IRS a penalty, be sure to check that the information is correct. If you can resolve the issue in the notice, you may be relieved of certain penalties. Those include failing to:

• Deposit certain taxes as required
• Pay on time
• File a tax return

However, if none of these apply to you and you do indeed owe penalties you may qualify for relief if you are assessed certain penalties. The Administrative Waiver and First Time Penalty Abatement waiver might help if you:

• have not filed a return previously or there have been no penalties in the last three prior tax years.
• have filed all current returns or filed an extension.
• or if you do not currently owe any taxes, but if you do you have made arrangements to pay.

Before asking for First Time Abatement relief, request that the IRS consider the reasonable cause relief provision initially. In doing so, you will be able to use the First Time Abatement at some other point if necessary. Remeber the First Time Abatement can only be used every three years.

Penalty Relief Due To Reasonable Cause

If you can show you made every effort to meet your obligations but were unable to do so due to such situations as a house fire, natural disaster, or a death in the immediate family then relief from penalties might be possible using reasonable cause. You must be able to produce all the facts and circumstances that illustrate specific reasons that caused your delinquent tax situation.

Penalties Relief Due to Statutory Exception

If you received incorrect written advice from the IRS that resulted in fines then you may qualify for a statutory exception.

Your Request Was Still Denied… It Still Might Not Be Over

If you receive a notice or letter saying your request was denied for penalty relief, consider using the Penalty Appeal Online Self-help Tool. It will help you decide if all options have been exhausted in the process.

As always, seek out the help of a qualified tax professional if you need more help concerning your tax situation.