Penalty Abatement, like some of the other topics covered in recent blog posts, is a potential tax resolution service. However, unlike the previous tax resolution services we’ve covered like Offer in Compromise and the Partial Payment Installment Agreement, Penalty Abatement is not a potential long-term solution for a large amount of tax debt owed to the IRS. Rather, as we note on our Penalty Abatement Service Page, Penalty Abatement relieves you from facing penalties from failing to file taxes or make payments on time as an individual or failure to deposit certain taxes as a business.
Of the tax resolution services we’ve covered so far, penalty abatement is most similar to Currently Non-Collectible. This is because both of these options seek to pause payments or avoid a specific fine. Conversely, Offer in Compromise and the Partial Payment Installment Agreement are tax resolution services that settle a total debt to the IRS. Interestingly enough, both Offer in Compromise and the Partial Payment Installment Agreement can allow taxpayers to potentially settle their tax debt to the IRS for less than the total amount owed.
If you are looking for relief from a growing tax debt to the IRS, read our previous blog posts, Tax Resolution Services: Offer in Compromise and Partial Payment Installment Agreement – What is it?, for more information. Or send us an email today to consult with one of the experienced tax resolution specialists at Bullseye Tax Relief.
If you’re looking for relief from a specific penalty related to failing to file or deposit taxes or make on-time payments, then Penalty Abatement may be for you.
According to the IRS’s Penalty Relief Page, as of Dec. 7th, 2020, “You may qualify for relief from penalties if you made an effort to comply with the requirements of the law, but were unable to meet your tax obligations, due to circumstances beyond your control. If you received a notice, be sure to check that the information in your notice is correct. If you can resolve an issue in your notice, a penalty might not be applicable.”
Checking that the information in the notice you receive is correct is an important part of the process because there are three different kinds of Penalty Abatement, one of them being Statutory Exception, which according to our Penalty Abatement Page, is for those who have asked for advice from the IRS and received incorrect information. If you have received a penalty due to misleading information from the IRS, the IRS will request certain information in order to deem you eligible for this type of waiver.
Besides the previously mentioned scenario, according to the IRS’s Penalty Relief Page, the other types of penalty relief are “Reasonable Cause” and the “Administrative Waiver and First Time Penalty Abatement.”
Penalties that a taxpayer can seek relief from, according to the IRS, are as follows:
“Failing to file a tax return
Failing to pay on time
Failing to deposit certain taxes as required
Other penalties as applicable.”
If you or your business need help with penalty relief, don’t go it alone! Send us an email at firstname.lastname@example.org to speak with one of our tax resolution specialists today!