Follow the instructions in the IRS notice you received. Some requests for penalty relief may be accepted over the phone.
First-time penalty reduction ·Reasonable cause · Eligibility to appeal a penalty Follow the instructions in the IRS notice you received. Use Form 843 to request a refund or request a reduction in certain taxes, interest, penalties, fees and tax additions.
TLC is the easiest of all penalty relief options. You can request it by calling the toll-free number on your IRS notice, or your tax advisor can call the specific hotline for tax professionals or the compliance unit (if applicable) to apply for the FTA for any amount of penalty. Taxpayers can apply for penalty relief. If they don't file or pay a penalty, taxpayers can request that the IRS “reduce penalties.” The reduction simply consists of eliminating the fines once they have been imposed on the taxpayer.
Penalties for non-filing (FTF) and non-payment (FTP) generally require a reduction because the IRS evaluates them electronically (through its computer systems) when a return is filed or a transaction is made with the balance due. I won't dare say that receiving bad advice is a failure to reduce penalties, but bad advice, whether from the IRS or a tax professional, is one of the most compelling reasons to reduce tax penalties. Owing any amount to the IRS is horrible, and what exacerbates the misery is when they add penalties to the amount owed. Tax penalty reductions are somewhat difficult to accept, since the IRS doesn't like to simply override them without justifiable cause.
There are more than 150 different IRS penalties for late filing, late payment, return errors and other activities that don't comply with the rules. Relying on an expert or something the IRS indicates is indicative of the usual care and prudence that the IRS seeks when granting a reduction in the tax penalty. Any death, serious illness, or serious medical condition is probably one of the best methods to justify a reduction in the tax penalty by the IRS. If after reading the article mentioned above you think you qualify, apply for a reduction in the penalty for the first time.
The best thing is that, if you are going to try to reduce the tax penalty, you rely mainly on other factors, rather than making this your main argument. The FTA can be used to reduce penalties for failure to file, pay and non-deposit during a tax period if you have a clean record of compliance over the past three years. When a precautionary measure is granted, especially after the evaluation of the sanction, the corresponding parts of the measure are deleted. If you request the reduction of a certain penalty for more than one year, you must have reasonable cause.
As defined by the IRS, the reduction of the tax penalty is generally granted when the taxpayer acts with the usual care and prudence, but still fails to meet their obligations.