The IRS is very strict about collecting their tax dues and often they don't care what the tax payers have to endure to cough up the money.
Unfortunately, one of the primary reasons cited by delinquent tax payers for non payment of their dues was financial distress. If you are facing a crisis, and the IRS has made matters worse by levying penalties and interest rates on your existing tax dues sending the total amount through the roof, and if you know that you simply cannot make this payment; there are options that can be used to ease the situation. Depending on your specific situation, you may be able to provide a plausible reason for not paying your taxes and if your financial condition is very bad, you may even be able to convince the IRS to right off a part or all of your debts. So let's take a look at the some of the reasons that can bail you out:
Reasonable Cause
Au contraire to the popular notion, the IRS is not trying to hurt, you need to remember that the taxes collected by the IRS are used for the benefit of the citizens. Yes, they can be quite ruthless in their collection tactics from time to time but then not all tax defaulters have a relevant cause for tax evasion. If you can prove that you had a reasonable cause for the non payment of taxes the IRS may lessen or even abate your penalties. If you are wondering what the phrase reasonable cause entails; here it goes: the IRS will allow a reasonable cause release for a person who has practiced general business care and has been diligent with his tax payments in the past but who could not meet the tax obligations.
However, remember that you will have to prove it to the IRS is a logical and legal way that you genuinely tried to pay your taxes by the deadline but there were unanticipated and unavoidable circumstances that prevented tax payment.
Given below is a list of events that the IRS may accept as reasonable cause.
* Calamities like fire, casual or other disturbances, natural disasters
* Acts of God
* Death of a loved one, serious illness in the family or other unavoidable circumstances
* Incorrect advice from the IRS
* Forgetfulness
* Records were not available
* Wrong advice received from the tax professional
* A genuine error
* Ignorance of law.
These are just some of the reasons but the IRS will be willing to also accept others as long as you can prove that you did indeed exercise business care but despite all measures you were unable to comply with your tax liabilities.
How to request penalty abatement?
The IRS will generally send you a notice with the information on the penalties levied on you. It is crucial to respond promptly to such a notice. If you not sure about the appropriate course of action, contact a Dallas Tax attorney at the earliest to sort out the matter.
There are two ways to carry out the paper work involved in the penalty abatement requesting procedure. You can either write your own letter or you could use Form 843 (Claims for refund and request for abatement). Make sure that you include a copy of your notice that states the penalties and the reasons for their application with the form or your letter.
Another way to stop the IRS is its tracks is to pay up the debts If you are settling your tax dues ensure that you mention that the payment should go towards the settlement of tax dues and not the penalties and interest. If you are paying by check mention it on the flip side. You may receive subsequent bills before the IRS responds to your penalty abatement request. Ensure that you have all your documents in order, also make several copies of the abatement request and the other supporting documents furnished with it.
You need to understand that you will not be able to file another request for abatement for the same reason if it is denied once. So it is essential to get everything right the first time around. Sometimes IRS regulations can be quite complicated, so it's best to enlist the help of a Dallas tax attorney
Unfortunately, one of the primary reasons cited by delinquent tax payers for non payment of their dues was financial distress. If you are facing a crisis, and the IRS has made matters worse by levying penalties and interest rates on your existing tax dues sending the total amount through the roof, and if you know that you simply cannot make this payment; there are options that can be used to ease the situation. Depending on your specific situation, you may be able to provide a plausible reason for not paying your taxes and if your financial condition is very bad, you may even be able to convince the IRS to right off a part or all of your debts. So let's take a look at the some of the reasons that can bail you out:
Reasonable Cause
Au contraire to the popular notion, the IRS is not trying to hurt, you need to remember that the taxes collected by the IRS are used for the benefit of the citizens. Yes, they can be quite ruthless in their collection tactics from time to time but then not all tax defaulters have a relevant cause for tax evasion. If you can prove that you had a reasonable cause for the non payment of taxes the IRS may lessen or even abate your penalties. If you are wondering what the phrase reasonable cause entails; here it goes: the IRS will allow a reasonable cause release for a person who has practiced general business care and has been diligent with his tax payments in the past but who could not meet the tax obligations.
However, remember that you will have to prove it to the IRS is a logical and legal way that you genuinely tried to pay your taxes by the deadline but there were unanticipated and unavoidable circumstances that prevented tax payment.
Given below is a list of events that the IRS may accept as reasonable cause.
* Calamities like fire, casual or other disturbances, natural disasters
* Acts of God
* Death of a loved one, serious illness in the family or other unavoidable circumstances
* Incorrect advice from the IRS
* Forgetfulness
* Records were not available
* Wrong advice received from the tax professional
* A genuine error
* Ignorance of law.
These are just some of the reasons but the IRS will be willing to also accept others as long as you can prove that you did indeed exercise business care but despite all measures you were unable to comply with your tax liabilities.
How to request penalty abatement?
The IRS will generally send you a notice with the information on the penalties levied on you. It is crucial to respond promptly to such a notice. If you not sure about the appropriate course of action, contact a Dallas Tax attorney at the earliest to sort out the matter.
There are two ways to carry out the paper work involved in the penalty abatement requesting procedure. You can either write your own letter or you could use Form 843 (Claims for refund and request for abatement). Make sure that you include a copy of your notice that states the penalties and the reasons for their application with the form or your letter.
Another way to stop the IRS is its tracks is to pay up the debts If you are settling your tax dues ensure that you mention that the payment should go towards the settlement of tax dues and not the penalties and interest. If you are paying by check mention it on the flip side. You may receive subsequent bills before the IRS responds to your penalty abatement request. Ensure that you have all your documents in order, also make several copies of the abatement request and the other supporting documents furnished with it.
You need to understand that you will not be able to file another request for abatement for the same reason if it is denied once. So it is essential to get everything right the first time around. Sometimes IRS regulations can be quite complicated, so it's best to enlist the help of a Dallas tax attorney
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