Biggest IRS Penalty Abatement Mistakes

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You like to think of yourself as a responsible taxpayer, but somehow, you found yourself in hot water with the IRS. Thankfully, it may be possible to clean the slate and get a fresh start. The IRS penalty abatement program grants you a one-time get-out-of-jail-free card.

IRS penalty abatement grants you forgiveness as a reward for your clean record. This option is not guaranteed, however; one wrong move, and you may find penalty abatement hopelessly out of reach. Be sure to avoid these common mistakes:

Failing to Demonstrate Previous Compliance

You may have a long history of complying with the IRS, but it could all be for naught if you fail to demonstrate previous compliance. To qualify for an abatement, you should have no record of non-compliance within the past three years.

Failure to Make Payment Arrangements

Your penalty abatement may get you out of paying steep fees, but it won’t take away your tax obligations. If you file for an abatement based on your failure to pay, you will need to demonstrate that you’ve made steps to resolve this. Installment agreements are acceptable, as long as you keep current on required payments.

Lack of Reasonable Cause Grounds

The IRS sometimes offers penalty relief due to ‘reasonable cause.’ Essentially, this means that circumstances beyond your control have made it virtually impossible for you to file or pay on time. In determining the reasonable cause, the IRS will closely examine all arguments and evidence presented in your favor.

Examples of reasonable cause include death in the immediate family or natural disaster. Reasonable cause abatements can be difficult to obtain, so it is imperative that your application contains ample evidence of your unique circumstances.

When you’re dealing with the IRS, there is no room for error. The experts at the Highland Tax Group can maximize your chances of securing an IRS penalty abatement. Reach out today to learn more about this program — and how you can qualify.