A small overdue tax debt could swiftly morph into an economic catastrophe the instant the IRS applies an income tax penalty to what you owe.
Penalties and interest are capable of multiplying the amount you owe to the Internal Revenue Service just within months.
Fortunately, if you've carried out your due diligence as a taxpayer, the Internal Revenue Service could provide you with a penalty abatement.
What Exactly Is a Penalty Abatement? In today's economy, who has in their possession ample cash to spare to have the ability to pay off the IRS in one lump total? A penalty abatement is an asking to lift all or part of the interest and penalties on the overdue debt.
Penalties and interest generally represent twenty-five percent of the total amount an individual has due to the IRS.
Oftentimes, individuals are able to satisfy the original amount of debt owed to the IRS.
Interest and penalties build it up to an outrageous total.
They are responsible for more or less $15 billion of the yearly IRS tax debt collection gap.
Don't let the government talk you into shelling out more than you have to.
Being indebted to the IRS does not justify them taking advantage of you! Do I Qualify for an IRS Penalty Abatement on What I Owe? Sometimes, you can fall into tax debt without having say over the predicament.
Perhaps you are the victim of a natural disaster, such as a flood or tornado, or perhaps had a family member get stricken with illness -- both events that needed addressing ahead of the Internal Revenue Service.
In these predicaments, it is entirely justifiable to be expecting the Internal Revenue Service to show some sympathy and not have you be responsible for additional interest charges and penalty fees.
You have a good possibility of obtaining a penalty abatement if you have followed faulty tips from a tax specialist, suffered missing records due to a earthquake or flood, and other occasions of this nature.
Typically, any issue that isn't within your control and is the direct reason of you not being able to pay back the debt amount that you owe.
You'll have a good chance at obtaining a penalty abatement, provided you did not actively try to avoid the Internal Revenue Service but did everything you could to meet your tax responsibilities in a reasonable window of time.
Requesting an Income Tax Penalty Abatementon the Debt Amount You Owe the Internal Revenue Service You are going to need Form 843 ("Claim Refund and Request for Abatement") to request a penalty fee abatement.
If you're going to be seeking your penalty abatement from the Internal Revenue Service on a joint return's tax debt, both you and your spouse have to sign your names on it.
Upon your submission of Form 843, it'll be issued to a representative, and your info will be evaluated and decided on.
To help your cause, you could also provide any records and files that promote your explanation.
Ensure you also keep a copy of everything you give the Internal Revenue Service.
If you choose to apply for an IRS penalty abatement on the tax debt you owe the Internal Revenue Service, you have to have the means to, at the least, satisfy the entire IRS debt with no penalty fees and interest.
Not everyone is as acquainted with the IRS tax code and what their rights are as they'd like to be as far as handling the IRS goes.
That is exactly why you have to speak with a tax debt pro when seeking an income tax penalty abatement on your IRS tax debt.