Our client hired us in January of this year to obtain an IRS penalty abatement on his behalf. He also hired us to mitigate his tax bill which totaled close to $25,000. He had a few stock sales that he didn’t expect such a high tax bill on and by the time he filed his 2010 and his 2013 returns the IRS had assessed quite a bit of penalty and interest.
The taxpayer had filed his 2010 return and paid the tax in full. He was also in the process of filing the 2013 tax return and had also paid the tax in full. He wanted a few things from our office. One, he wanted to mitigate the IRS penalties as much as possible. Two, he wanted to be sure the IRS didn’t file a lien. And finally, since his bill totaled $25,000 in penalty and interest, he wanted to set up a payment plan on the balance dues. Finally, he wanted to be sure he could get into a new home without worry the IRS would file a lien, report the information to the credit bureau’s, and inform the title company of the tax issue.
By the time our client hired us the IRS hadn’t quite received and processed the 2013 tax return as of yet. Therefore, we needed to monitor the posting of the return on a weekly basis. If the return posted, and we didn’t set up a plan, the IRS may have filed a lien. Luckily we caught up with the fact the IRS posted the return sometime late February. At that moment we contacted the IRS and requested a payment plan, a penalty abatement (on the 2010 tax year only), and requested the IRS to withhold from filing a lien. Good news, the IRS was privy to all of our requests. They granted a first time IRS penalty abatement on the 2010 year totaling $5,400. They also set up a payment plan and withheld from filing the IRS tax lien. We ended up pursuing an IRS penalty abatement on the 2013 tax year as well. However, we haven’t heard back on the larger of the two bills as of yet. The client is now on a payment plan to cover the remaining bill of $19,000! We were able to save our client almost 20% of his tax bill.
Long story short the taxpayer received an IRS penalty abatement, was set up on a payment plan, and he was able to get into the house of his dreams! A few more months and we should hear back on the 2013 penalty abatement.
Let us know if you are trying to mitigate penalties on one or two years worth of tax debt. We have been successful with an IRS penalty abatement in the past and will continue to be successful moving forward! We have attached a PDF of the IRS Penalty Abatement acceptance letter below.