The thought of an IRS tax penalty can be frightening to the average taxpayer. The agency can impose more than 100 different tax penalties, even doing so in batches. For example, if you file your return late and you owe a balance, expect to be hit with two penalties: one for failure to file on time and another for failure to pay your balance on time. The good news is that there are ways to make an IRS penalty abatement request, especially if you seek advice from a qualified Los Angeles tax lawyer.
IRS Penalty Abatement Qualifications
According to the IRS penalty handbook, there are several situations in which the agency may consider granting an abatement request. These include:
Flawed advice from the IRS: If you receive faulty tax advice from the IRS in writing, you are qualified to an automatic penalty abatement. If you speak with an agent and he or she gives you mistaken tax advice, you may be able to get an abatement. In this case, you’ll need supporting documentation of the conversation.
Natural or man-made disaster: If you’ve been the victim of a disaster such as a fire, a flood, or a tornado, the IRS may consider abating any tax-related penalties you’ve incurred. In cases where a federal state of emergency is declared, the IRS typically issues an abatement to all affected citizens in the area.
Severe personal circumstances: This might include situations such as a diagnosis of a serious or terminal illness within the family, the death of a loved one, or a violent crime. However, the IRS uses a “reasonable cause” standard to determine if these situations legitimately contributed to the incurring of a penalty.
Applying for an IRS Penalty Abatement
IRS Form 843 “Claim for Refund and Request for Abatement” can be used to request an abatement. Form 843 must be accompanied by a written explanation that justifies the abatement. To increase the chances of having your request approved, it is always best to cite the specific section in the IRS penalty handbook that applies to your situation.
Should You Request the Abatement on Your Own?
The process of making an IRS penalty abatement request may seem simple, but it can pose several pitfalls. The only situation where the IRS is required to grant the abatement automatically is if you have written advice from the agency that is erroneous, which is a very rare occurrence. In most situations, you’ll have to make your case and this often requires assistance from a qualified tax advisor. Seeking the assistance of an experienced Los Angeles tax lawyer can make it much easier to get your abatement request granted.