Why You (Generally) Should Fight Your IRS Penalties

How did you first respond when you learned you had been targeted by the IRS? If you’re like many Americans, you immediately assumed that you would eventually need to pay up. This widespread belief perhaps explains a concerning 2012 Treasury Inspector General for Tax Administration report indicating that just eight percent of taxpayers have requested and received the FTA penalty abatement waiver.

Dealing with the IRS may be difficult, but it can pay dividends. Success is within easier reach than most taxpayers suspect. The following are just a few of the many reasons why fighting your IRS penalty could prove worthwhile.

The IRS Isn’t Perfect

Taxpayers aren’t always to blame for penalties assessed by the IRS. As a Wall Street Journal story points out, the IRS cites agency errors as one of the top reasons why penalty abatements are granted. Fighting back won’t only deliver personal financial relief; your efforts can help to hold the IRS accountable for its excessive errors.

Abatements Are Available in a Variety of Circumstances

Taxpayers typically assume that penalty abatements are available for only the most dire situations. In reality, however, these waivers can be granted under a broad range of circumstances. Examples highlighted on the IRS website include:

  • Serious illness or injury
  • Fire
  • Death in the family
  • Incapacitation of a close family member
  • Inability to obtain necessary records

Even taxpayers who are aware of the abatement program rarely realize that they can qualify despite being assessed penalties in the past. The IRS merely prohibits waivers for those given penalties within the last three years.

Resist your urge to give in the moment you learn of negative action from the IRS. The Highland Tax Group can guide you every step of the way as you fight your penalty. Call 720-398-6088 today to get started.