Will the IRS Automate Penalty Abatement?

Every year, millions of Americans fail to file or pay their taxes on time. These individuals face harsh repercussions, but those with a history of compliance sometimes qualify for penalty abatement. The process for securing abatement is notoriously confusing, but a solution may be just around the corner: an automated system.

The Potential For an Automated Solution

According to an IRS watchdog organization known as the Treasury Inspector General for Tax Administration (TIGTA), just eight percent of individual taxpayers request and actually receive the first-time penalty abatement waiver. Experts at Accounting Today believe that this issue could be at least partially resolved through an automated system, in which those with clean compliance histories would be immediately deemed eligible and granted abatement. These individuals would receive notice of their abatement, as well as a clear reminder that FTA is a rare opportunity — and that they’ll face harsh penalties if they file or pay late again in the future.

Current Options For Making Abatement More Accessible

Automated abatement may not yet be available, but alternate options exist. In recognition that most qualifying taxpayers don’t obtain penalty abatement, the IRS has recently taken extra steps to make it more accessible. For example, phone requests were first accepted in 2015, allowing single-year waivers for those with a strong history of paying their taxes on time. Soon after, the IRS established a penalty assistance hotline. Still, discussing penalty abatement with the IRS can seem intimidating; until an automated system is established, many people will fail to secure much-needed relief.

As automated abatement is not currently available through the IRS, it is critical that you make every effort to secure penalty relief if you’ve paid your taxes late. Highland Tax Resolution can help; call 720-398-6088 at your earliest convenience to learn more.