Best choice for Financial and Cryptocurrency News

- Advertisement -

- Advertisement -


What To Do With Tax Penalties and Interest

If you receive a tax bill that contains penalty and interest amounts, then you are in need of IRS tax relief. Keep in mind that the IRS has specific guidelines for allowing abatement of some of all penalty and interest charges. As a general rule, make sure that whatever correspondence you have with the IRS is carefully documented and photocopied. That means making copies of everything you receive in the mail and taking detailed notes on any phone correspondence.

If you want to eliminate tax penalties and interest charges, you will need to ask the IRS. There are some common things that the government will look at when considering your case. If you can show that a family death prevented you from filing on time, the IRS will possibly remove the penalty amount. As well, if you had other reasons for not paying on time, write down the reason, being as specific as possible. When you ask for IRS tax relief, list out any reasons that caused a delay in your payment or filing. That way, the IRS will be able to deal with your case quickly and effectively.

If you are unsuccessful the first time around, remember that you can ask for an appeal. By law, the IRS must let you appeal a negative decision. There is not a standardized government form to fill out. In fact, you merely need to send a written letter to the IRS asking for an appeal of your case. If you want IRS tax relief, but do not want to file an appeal, then you can always pay the penalty and then fill out form 843, which is a “claim for refund and request of abatement.”

After that, you should be prepared to abide by what the IRS says, because your only other route is to sue in District Court or the Court of Federal Claims. Unless you owe a huge amount of penalties and interest, that method will likely be counterproductive. Also keep in mind that the IRS deals with interest and penalties separately. Penalties are somewhat easier to eliminate than interest. In most cases, unless you can prove that the IRS made a computational error, then the amount of interest will be payable. Finally, if you still want IRS tax relief, the only way to negate most penalties and interest if through bankruptcy, which should only be pursued in extreme circumstances.

Comments are closed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. AcceptRead More