NCDOR Tax Relief | IRS Penalty Abatement or Reduction

IRS Penalty Abatement or Reduction Solutions

Did you know a taxpayer can request an abatement or reduction of IRS penalties? Form 843, also known as a Claim for Refund and Request for Abatement is the correct form to complete and submit to the IRS. Form 843 requires that you indicate, among other things, the type of penalty that you’re asking to be abated by identifying the actual law for which it applies. Some examples of penalty laws which are often used include:

Internal Revenue Code section 6651(a)(1) Failure to File Tax Return
Internal Revenue Code section 6651(a)(2) Failure to Pay Tax when Due

Additionally, Form 843 also requires that you explain the reasons that you’re asking for the penalties to be abated. Those reasons include, but aren’t limited to the following examples:

Written or oral advice from the IRS
Advice from a tax adviser
Correction of an IRS error
Fire, casualty, natural disaster or other disturbance

Some penalties can also be abated if you have a reasonable cause for not complying and can show that you exercised ordinary business care and prudence. To get an abatement of penalties due to reasonable cause, you must have a reason that indicates you had no control over the situation. For instance, you were unable to file your tax return timely because you were seriously ill.

We recommend that you don’t attempt to request penalty abatement yourself. The IRS’s penalty abatement review procedures are very strict. One mistake in the process can be cause for automatic denial of your request. Although you have a right to request abatement of penalties, it’s important to know that the IRS doesn’t easily agree to reduce or eliminate penalties against you. No one can guarantee that the IRS will approve your request to abate penalties. Approval or denial is solely in the hands of the IRS, and their decision can take months.

If the IRS denies your request to abate penalties, you should know that you have a right to request the IRS’s Appeals Division perform an administrative review of the decision. The process requires a separate request and meetings with an IRS Appeals employee. Carolina Tax Resolutions has the experience necessary to represent taxpayers, including working with the IRS’s Appeals Division if the IRS rejects your request for penalty abatement.

Whatever you do, it’s in your best interest to contact Carolina Tax Resolutions to discuss your unique situation. Your circumstances may fall into a category not shown above. Regardless, we will still help you. Penalties can accrue and get larger each day. The sooner you call us, the faster we can help you by taking the necessary steps to get these penalties eliminated. You can be back on your feet in no time.