Penalty abatement from the IRS can provide relief from certain penalties associated with tax problems under specific circumstances. Here’s how you can request penalty abatement:
Understand Eligibility
The IRS considers penalty abatement for reasonable cause. This includes circumstances beyond your control that prevented you from meeting your tax obligations, such as natural disasters, serious illness, death in the family, or unavoidable absence.
Request in Writing
Write a penalty abatement request letter to the IRS explaining your situation. Clearly state the tax periods and penalties for which you are requesting relief. Include details of the circumstances that led to your inability to comply with tax obligations.
Provide Documentation
Support your request with relevant documentation. This may include medical records, insurance claims, legal documents, or any other evidence that substantiates your claim of reasonable cause.
File Tax Returns
Ensure that all required tax returns are filed before requesting penalty abatement. The IRS typically requires that all tax returns for the periods in question be filed before they consider a penalty abatement request.
Submit the Request
Send your penalty abatement request letter and supporting documentation to the IRS address specified on your penalty notice or to your local IRS office.
Follow Up
After submitting your request, follow up with the IRS if you don’t receive a response within a reasonable timeframe. Be prepared to provide additional information or documentation if requested by the IRS.
Professional Assistance
Consider seeking assistance from a tax professional or accountant experienced in penalty abatement requests. They can help you prepare a strong case and navigate the process effectively.
Appeal if Necessary
If the IRS denies your penalty abatement request, you have the right to appeal the decision. Follow the instructions provided in the IRS notice for filing an appeal.