The IRS has over 148 different penalty types that can be assessed on a taxpayer or business. What’s even worse is interest and additional penalties can continue to grow from the original penalty. That’s just on the federal level. Maryland has a whopping 13% interest, not to mention they are not as forgiving when it comes to old tax returns. I have seen the State go after clients for taxes from the early 90’s! These penalties and interest charges continue to rack up a bill that sometimes is larger than the original infraction. As bad as they seem, IRS penalties can often times be reduced or even wiped out completely, but you have to know what you are doing. And you must have a justifiable reason to ask for them to be removed.
Reasons to request abatement of penalties:
When requesting an abatement you should enclose copies of your supporting documents. If you are able to pay the tax bill, you can also enclose a check. If you are unable to pay the tax bill in full, you can enclose a request for a payment plan.
Penalties are meant to help bring a taxpayer into compliance. The IRS knows that people make mistakes and can be forgiving, if the situation is right. If you have questions about this or any other tax related problem, we are happy to speak to you. Please call (410) 872-8376, we can provide you with more indepth information on this and other tax topics. If $10,000 or more is owed we highly suggest you consult with a tax attorney.
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