Everyone hates tax time. It doesn’t matter if you get a refund or not because the time leading up to that point has you worried about penalties and possible interest due. While there’s never a way to make taxes not stressful, there are ways to make them less stressful. If you are in need of IRS tax help concerning interest and penalties, keep reading for some helpful tax tips.
One thing that most people do not realize is that 1/3 of all tax penalties can be abated. This means that any levied penalties that you may incur have the possibility be reduced or even eliminated. The only thing you have to do is show that there is ‘reasonable cause’ for the government to drop the penalties. Here are some examples of what the IRS considers to be good excuses:
1. Unavoidable absence.
2. Serious illness or death of taxpayer or his/her immediate family.
3. Inability to determine taxes due to reasons that are beyond taxpayer’s control.
4. Destruction of a business or personal records by water or fire damage.
5. Lack of monetary funds.
6. Civil disturbances.
7. Any other reasons that establish the taxpayer’s inability to comply with IRS’ time limits.
Once a taxpayer receives the tax notice about possible penalties, they must request an abatement and put it in writing. This is very important and it should never be put off. That person must put reasons for requesting the abatement and what the reasonable cause is. Make a copy of the penalty letter you received and all the documentation you feel is necessary to help your cause.
From this point, the IRS will either reject your motion or approve it. If they reject it, they will send you a letter stating why they did so. From there you must do one of the following:
· Ask the IRS for an appeal. All you have to do is just send a letter to the IRS and label it “Penalty Appeal”.
· Visit or call your local branch and talk with a collection specialist. They will explain what you can do to help your cause.
· File a Form 656 which is an Offer in Compromise. This is a negotiation settlement.
· You can just pay the penalties off and then file for reimbursement through a Form 843.
If you are unsure as to what you need to do or why you are receiving a penalty in the first place, contact your local IRS tax help agency today. Many tax accountants specialize in fighting tax penalties and can save you hundreds of dollars as well as ensure that everything that can be done will be done.