IRS Penalty Removal
We've pretty much seen it all. Our most common are penalties for retirement savings form 5500, late filing tax return penalties and Offer In Compromise. For individuals, Limited Liability Companies, S-Corporations, C-Corporations and Sole Proprietorship returns!
The IRS will remove penalties under certain circumstances for Failure to File or Pay Penalties and Accuracy Related Penalties.
The most common being either: First Time Penalty Abatement and Reasonable Cause Penalty Abatement.
First Time Penalty Abatement
The IRS rules for First Time Penalty Abatement require the taxpayer to be in good standing with the IRS meaning:
- No outstanding tax returns in the three prior tax years; and
- Paid the tax when it became due; and
- Have no unpaid tax or you are in resolution status with the IRS for unpaid tax.
Our team will either write a formal abatement request or have a discussion with the IRS to remove the penalties.
Reasonable Cause Penalty Abatement
Per the IRS guidelines, "Reasonable Cause Abatement is determined on a case-by-case basis considering all the facts and circumstances of your situation."
Typical accepted reasons include incidents beyond the taxpayer's control and made attempts to comply:
- Fire, casualty, natural disaster, or similar disturbances (COVID19)
- Death, serious illness, incapacity, or unavoidable
- Inability to obtain records
- Undue Hardship
- Erroneous advice or reliance on a professional