How do I reduce or overturn my IRS tax penalties?

Maybe you filed a tax return late or ran into tough times and could not pay the balance in full. Either way, the IRS has applied penalties to your outstanding balance, and you might have noticed that they are not insignificant.

Penalties exist to encourage voluntary compliance by supporting the standards of behavior required by the Internal Revenue Code. For most taxpayers, voluntary compliance consists of preparing an accurate return, filing it timely, and paying any tax due. Efforts made to fulfill these obligations constitute compliant behavior. Most penalties apply to behavior that fails to meet any or all of these obligations.

Penalties encourage voluntary compliance by:

• Defining standards of compliant behavior,

• Defining consequences for noncompliance, and

• Providing monetary sanctions against taxpayers who do not meet the standard.

The IRS will consider reducing or abating penalties when the taxpayer can show they have reasonable cause for whatever caused the penalty orqualify for an administrative relief program the IRS has called “first-time penalty abatement.”

First-time Penalty Abatement is an administrative relief program created by the IRS for taxpayers who are in tax compliance, have made arrangements to pay any outstanding balance, and have not been penalized for the three prior tax years. It is meant as a relief for taxpayers who generally comply but just had an issue that caused them to fall out of compliance.

Reasonable cause relief occurs when the taxpayer can demonstrate that despite their reasonable attempts, they could not comply. The burden is on the taxpayer to provide supporting documentation and paperwork to ensure the IRS can see why they failed to comply and abate the penalties.

If you either have balances that you owe to the IRS and would like to reduce the penalties the IRS has applied, or perhaps you have resolved those balances and would like to have the penalties abated and recover the money from the IRS. Please contact me at (504) 680-6057 or at ian@semmlaw.com. Let me look at your situation and see if I can obtain relief from the tax penalties.