Eliminating Penalties: Penalty Abatement

Don’t Pay More Than You Should.  Get Rid of Unfair, Expensive Penalties.

When you owe back taxes, the interest and penalties can double the amount you owe after just a few years.  If you have failed to file your returns on time, the IRS penalizes you 5% each month for five months, resulting in a penalty of 25% of the tax owed.  If you have not paid your tax on time, the IRS penalizes you one-half of 1% monthly, with a limit of 25%.  Non-penalty interest continues to compound.

The Bankruptcy and Tax Law Center attorneys use their experience and knowledge to abate or remove penalties.  In certain cases, we help eliminate the interest as well.

Generally, you may qualify for a Penalty Abatement if you can show that factors out of your control prevented you from filing and paying your taxes.  The IRS calls these factors “Reasonable Cause.”  Here are some examples of why a taxpayer should be excused from penalties:

  •        Family problems, such as a divorce
  •        Theft or destruction of records
  •        Major illness
  •        Incarceration
  •        Bad advice from a tax representative
  •        Natural disaster, such as a hurricane, wind storm, or flooding
  •        Unemployment for a long time
  •        Death in the immediate family

If you are granted a Penalty Abatement, you must pay the underlying tax and interest in full or through an Installment Agreement.

Filing a Penalty Abatement request is complicated.  You have the best chance of success when a tax attorney makes your case.  Call the Bankruptcy and Tax Law Center at 1-800-TAX(829)-6183 or fill out our simple Contact Form to learn whether you qualify for a Penalty Abatement.

Don’t pay a penny more than you should!