What Is Penalty Abatement and How Can a Tax Lawyer and CPA Firm Help You Get It?
When you owe back taxes, getting your financial situation under control can feel almost impossible since interest and penalties continue to accrue as long the taxes go unpaid. However, there are cases when your lack of payment may have been due to extenuating circumstances. In certain situations, you are, in fact, eligible for a removal or reduction–also known as an abatement–of the penalties you owe for not paying or paying late. Find out what those circumstances are and how you can work with tax lawyers to reduce your overall debt.
Paying taxes on time is the responsibility of every citizen. However, there are certain events that make it nearly impossible to keep on top of that particular task. The problem, though, is that you still owe your back taxes, as well as interest and penalties on the unpaid amount. In certain circumstances, however, the IRS considers that you have “reasonable cause” for not paying on time, and you might qualify to have your tax penalty reduced or removed under the penalty abatement policy. There are different circumstances recognized in a penalty abatement context, including: the death of a close family member, an unavoidable absence (for example, time spent in prison or a rehabilitation facility), or inadvertent damage to or destruction of your tax records (for example, loss or damage caused by fire or flood). If any of these events caused you to owe IRS back taxes, you may qualify for penalty abatement. Tax attorneys specializing in tax resolution can be invaluable in helping determine if you meet the criteria for penalty abatement.
As you might expect, the IRS doesn’t just extend penalty abatement to everyone who says that they qualify. You have to provide documentation that supports your claim of reasonable cause, and you have to go through certain channels to even bring a penalty abatement claim to the IRS. This is where having a qualified tax resolution firm on your side is a major plus. Tax resolution offices are usually staffed by a combination of CPAs and tax attorneys, which means that your tax situation gets both the financial and legal attention it needs. These professionals know how the IRS works and what the most efficient avenues are for dealing with your situation. In terms of penalty abatement, your team of attorneys and accountants in tax resolution will be able to advise you on exactly what you need to collect as documentation and will facilitate communication with the appropriate branch of the IRS. Instead of having to wade through all of that bureaucracy on your own, you’ll have a team of professionals in your corner helping make sure that you get the benefits for which you qualify.
If you owe back taxes due to an extenuating circumstance, you may qualify for penalty abatement. If you think this may apply to your situation, get a tax lawyer and accountant in your corner who are experienced in tax resolution to help you reduce the amount you owe.
