Penalty Abatement

Penalty Abatement

If you fail to comply with all of the requirements of the Internal Revenue Service, you may owe various penalties for every tax year in which you did not comply. Fortunately, many taxpayers are able to qualify for an IRS penalty abatement, which allows them to settle their accounts with the IRS without paying any more than they need to. Consult the information below to determine whether you may qualify for penalty abatement.

About IRS Penalties

The IRS assesses penalties against taxpayers for a variety of reasons, and more than 100 different penalties can be assessed. However, some of the most common penalties assessed include:

  • Penalties for late filing
  • Penalties for late payment of taxes owed
  • Penalties for substantial understatement
  • Penalties for negligence
  • Penalties for late federal tax deposits


In fact, the penalty for failing to pay the taxes you owe on time accounts for more than half of all penalties assessed by the IRS.

What Is Penalty Abatement?

When the IRS abates penalties, it reduces or eliminates them. The IRS may elect to reduce your penalties if you have any good excuse for why you owe the penalties, generally known as reasonable cause. Some examples of situations that might help you qualify for penalty abatement include:

  • Living in an official disaster area
  • Being ignorant of the law that led to the penalties
  • Making an honest mistake
  • Receiving inaccurate advice from an IRS representative or tax advisor
  • Experiencing significant financial hardship
  • Death or serious illness affecting yourself or a loved one
  • Inability to comply because of an unavoidable absence, such as time spent in prison or in coma
  • Inability to obtain the records needed to comply with IRS requirements


The First Time Abatement Rule

One of the easiest ways to qualify for penalty abatement is through an administrative waiver. If you have not had penalties assessed against you in the past three years, you can typically use the First Time Abatement Rule to obtain this waiver and reduce the total amount of your penalties. To obtain an administrative waiver under the First Time Abatement Rule, you must submit a formal request for penalty abatement to the IRS in writing.

Keep in mind that the minimum requirement for penalty abatement under this rule is only if you have already submitted all of the required tax returns on time and are in full compliance. You must also have made arrangements to pay any tax you owe.

Can My Interest Be Reduced Or Eliminated?

If you owe back taxes or penalties, the IRS will typically charge interest as well. Unfortunately, penalty abatement will not typically eliminate interest. If interest accrued on the penalty itself, it will be reduced or eliminated when the penalty is reduced or eliminated. However, interest on back taxes cannot typically be abated. The only situation in which a taxpayer may qualify for interest abatement is if the taxpayer is able to show that the interest should never have been applied or that the IRS is responsible for significant delays that caused more interest to accumulate.

Can I Get Help With Penalty Abatement?

If you owe penalties to the IRS, you may have a better chance of qualifying for penalty abatement if you seek assistance from a tax relief professional, such as the Enrolled Agents at Samaritan Tax Relief. A tax relief professional who understands all of the laws that led to the assessment of your penalties, as well as the laws surrounding penalty abatement, can help you take the right steps to reduce what you owe. However, keep in mind that not every tax professional has experience with penalty abatement requests. Before you hire a tax advisor to help you with this matter, be sure to ask him or her what training and experience he or she has in relation to penalty abatement.

What if I Can’t Pay My Back Taxes?

IRS penalty abatement will not eliminate any back taxes you owe to the IRS. If you cannot afford to pay your back taxes, however, other relief programs may be able to provide you with IRS tax relief. For example, in some cases, the IRS will allow you to settle your total tax debt for less than the full amount you owe if you make an acceptable offer in compromise. Alternatively, if you think you will be able to pay your tax debt over time, you can arrange an IRS installment plan or IRS payment arrangement. Depending on your circumstances, you may also qualify for innocent spouse relief or another form of tax forgiveness. Finally, some taxpayers are able to eliminate their back tax debt through bankruptcy, although you must meet several requirements in order to take advantage of this option.

Samaritan Tax Relief Penalty Abatement Assistance

One of your most important rights as a taxpayer is your right to have a qualified tax relief professional, such as an Enrolled Agent (EA), represent you in front of the IRS and/or States and provide tax resolution for your IRS penalty elimination request to ensure that you have the best chance for removal of your tax penalties.

When you hire Samaritan Tax Relief to assist you with your IRS penalty abatement request, we will guide you through the process while advocating on your behalf and protecting your interests.

Samaritan Tax Relief is here to help you because when you’re dealing with a tax debt any measure of tax relief accompanied by a reduction in your tax liability is welcome. The worst thing you can do is to do nothing at all and settle for the full amount of tax liability? The best decision is to take the necessary first step and to try to obtain some tax debt relief!

Click on the “Get Help” button at the top of the page to take that first step.