You will qualify for penalty abatement for reasonable cause if you tried to comply with the law, but were unable to meet your tax obligations due to circumstances beyond your control.
IRS Penalty Abatement
Fortunately, the IRS has created the first-time penalty abatement
This is a little heard of administrative waiver that many American taxpayers know much about.
If you own a business or you are an individual taxpayer, you may receive a penalty on top of what you owe in tax to the IRS.
The first time penalty waiver allows compliant taxpayers to request abatement or remove certain penalties.
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Since inception, I have been successful at eliminating IRS penalties for a wide variety of clients across the country.
IRS Penalty Relief
You may qualify for relief from IRS penalties and eligibility for an IRS penalty abatement if you made an effort to comply with the requirements of the law, but were unable to meet your tax obligations, due to circumstances beyond your control.
Types of Penalty Relief
Administrative Waiver and First Time Penalty Abatement
What Is Reasonable Cause For IRS Penalty Abatement?
The IRS website states that, for a penalty to be waived, your failure to comply must have been due to reasonable cause and not willful neglect.
This is based on the fact that certain tax situations are beyond your control and you shouldn't be penalized because of them. Generally speaking, if you can prove that the failure to comply with IRS regulations is due to reasonable cause and not willful neglect, the IRS will abate your penalty.
Remember though, this is usually decided on a case-by-case basis and there's no guarantee that your penalty will be waived. What may be deemed as reasonable cause for one person might not be reasonable cause for another.
Reasons The IRS Will Remove Penalties
The most common reasons the IRS will remove penalties are if you can show that you had a reasonable cause for not filing or paying on time.
You may qualify if you can demonstrate that you were suffering from economic hardship at the time.
Other reasons the IRS may waive a penalty include if the failure to file or pay was due to death, natural disasters, or other unavoidable circumstances.