Abatement could save you from tough tax penalties

If you’ve been late in filing your taxes or paying them, there may be a chance for an abatement, which would reduce or eliminate the penalties you may have incurred. If you have a good record of submitting and paying taxes on time in the past, you may be eligible to be granted an abatement of your late filing and/or late payment penalty. However, you must meet specific qualifications in order to be eligible for a penalty abatement.

First, it’s important to understand what late payment and late filing penalties are and what factors can affect whether you’ll be granted an abatement. Tax penalties are amounts you owe the IRS in addition to what you owe in taxes. Penalties are based on two factors: how much you owe in taxes to begin with, and how late you are in filing your tax return or paying your taxes. For income tax, these penalties are a percentage of the total amount of tax owed.

If you have a strong case for an abatement, you may save a significant amount of money that would otherwise be paid to the IRS as a penalty. However, you can only get an abatement if you’re eligible. There are different rules that apply depending on the type of penalty that’s being abated – for example, there is “first time abate” for failure to file and failure to pay  penalties, so long as certain requirements are met.  

Many IRS penalties can be abated based on a legal standard known as “reasonable cause”, or the idea that you had reasonable circumstances which caused the issue. An argument for reasonable cause is often denied in the case of late filing and late payment, as the IRS claims that “You’re responsible for knowing or getting advice on how to file returns and pay or deposit taxes on time.” In cases of reasonable cause, it’s important to establish that you did make an honest and committed effort to properly file.

If you’re eligible for an abatement, you’ll want to follow the proper procedure to request it. You may file a protest, or use Form 843 to request for abatement. You may also need to complete and submit certain documents along with your abatement request to provide evidence to your case.

After your request is filed, the IRS will review it and decide whether to grant your abatement request. If your request is approved, you will receive a letter notifying you of the decision. If your request is denied, you will receive a letter explaining why and affording you an opportunity to file an appeal. 


UPDATE:  The IRS announced on August 24, 2022 that it would be automatically abating several types of penalties for late filed 2019 and 2020 tax returns filed before September 30, 2022.  

For more information regarding tax penalties and assistance in obtaining an abatement, contact Weisberg Kainen Mark, P.L. at (305) 374-5544 today to schedule your consultation.

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Weisberg Kainen Mark, PL

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