How can you get your IRS penalty waived?
Penalty Relief
If you attempted to comply with tax rules but could not do so due to circumstances beyond your control, you may be eligible for penalty relief.
You should double-check the facts if you get a notice or letter, which you almost certainly will. If the information is inaccurate, follow the directions in the message or letter. The IRS may not impose a penalty if you can remedy the problem.
Sometimes, the IRS may accept requests for penalty alleviation over the phone. You can contact the IRS at the toll-free number in the upper right corner of your notification or letter, but be aware of long waiting times. When you call, you should have the following information handy:
- The notice or letter we sent you
- The penalty you wish to be absolved
- The reasons you believe the IRS should remove your penalty
Penalties Eligible for Relief
The penalties eligible for tax penalty relief are endless, and we've made a list for you to see if you can get your penalty relieved. The penalties eligible for penalty relief include:
- Information Return
- Failure to File
- Failure to Pay
- Accuracy-Related
- Failure to Deposit
- Dishonored Check
- Underpayment of Estimated Tax by Corporations
- Underpayment of Estimated Tax by Individuals
- Other penalties as applicable
Interest on a Penalty
The IRS does charge interest on penalties. The day they start charging interest varies depending on the type of penalty. Interest raises the amount you owe until you pay your obligation in full. You can look at the IRS's official website for more information on paying your fine. If you have so many tax penalties and feel like you need professional help, our tax consultants are always available to support you in rebuilding your life to a life without debt.
Penalty for late filing
The IRS will levy a penalty if you file late unless you have a legitimate extension of time to file. If you file late, you will pay 5% of the tax owed for each month you are late, up to a maximum of a quarter of your total debt. If your return is more than 60 days late, the minimum penalty is less than $100 or the total amount owing on the return.
You can also receive a penalty if you incorrectly calculated your tax. For example, if the tax you submit on your return is less than the proper tax by more than 10% or $2,000, whichever is greater, you may be subject to a penalty. This penalty will be 10% of the difference between the tax you declared and the tax you owe.
Finally, you may receive a fine for late payment. If you do not pay your tax when it's due, you are going to get a penalty of 0.5% of the unpaid amount monthly, all the way up to 25%
Disputing a penalty
We can't adjust the penalties for reasonable cause if you don't qualify for penalty removal or reduction due to retirement or incapacity. However, the IRS may consider changing if we assessed the penalty after you relied on inaccurate written guidance from us.
To see whether you are eligible to dispute a penalty, you should examine whether you match the following requirements:
- The written advice we provided directly responded to your written advice request.
- The inaccurate written advice we provided you was not the consequence of serious omissions or inaccuracy in your written request for help.
- You legitimately relied on our written guidance and were fined.
If you feel you fulfill the conditions, you can send the IRS a declaration signed under penalty of perjury describing how our incorrect written advice resulted in the sentence. You should include a copy of your written advice request and our written response. Send the original statement and copies of the supporting papers to the address on your penalty notice, and keep a copy of any documents you sent.
Getting Help
You can authorize someone to contact the IRS on your behalf, which is recommended if you have a significant tax liability. You still have options if you are unable to. resolve the penalty alone. You may, for example, apply for the Fresh Start program with Ideal Tax. This program began in 2011, and the IRS has made efforts to assist persons with large amounts of tax debt. With this plan, you can set up payment schedules or pay off a portion of your debt. However, there are rigorous requirements for participating, which is why it's considered wise to get advice from a trusted tax professional.
