The IRS and state taxing agencies assess many types of penalties which are eligible for relief.

Penalties eligible for penalty relief include:

• Information Return penalty
• Failure to File penalty
• Failure to Pay penalty
• Accuracy-Related penalty
• Failure to Deposit penalty
• Dishonored Check penalty
• Underpayment of Estimated Tax by Corporations penalty
• Underpayment of Estimated Tax by Individuals penalty
• Other penalties as applicable

Your familiar with the adage “If you do not ask, you don’t receive.” Sometimes, a simple phone call or letter is all that it may take to eliminate some tax penalties.

To begin, the IRS may provide an automatic “get-out-of-jail-free card” first-time penalty abatement for taxpayers who have a clean compliance history for the preceding 3 years (filing and paying on time with no penalties). Note however, that if you are seeking an abatement of the failure-to-pay penalty, it will continue to accrue until the underlying tax is paid in full; therefore, it makes sense to seek this form of abatement after the underlying tax is paid in full.

If this form of relief is not available, then we can explore whether you qualify for penalty abatement relief based upon a statutory exception, administrative waiver or “reasonable cause.” Reasonable cause is based on all the facts and circumstances of each situation and is generally established if the taxpayer exercised ordinary business care and prudence. Our team of tax professionals have a thorough understanding of the IRS Penalty Handbook (IRM 20.1) which is the primary source of authority for administration of civil tax penalties, including abatement. We are intimately familiar with the various grounds for relief which often include one or more of the following:

• Ordinary Business Care and Prudence
• Circumstances Beyond Taxpayer’s Control
• Death, Serious Illness or Unavoidable Absence
• Fire, Casualty, Natural Disaster or Other Disturbance
• Inability to Obtain Records
• Mistake
• Erroneous Advice or Reliance
• Ignorance of the Law

Our Penalty Abatement Requests are prepared by former IRS personnel and drafted with the appropriate IRM 20.1 Handbook references in a manner which both facilitates processing and offers the greatest likelihood for acceptance. For Penalty Abatement Requests which are not accepted, we often turn to the IRS Office of Appeals and achieve a more favorable result upon reconsideration.