Filing for penalty abatement is a simple process for those who know the steps involved. If you feel that you qualify to have your tax debt reduced, you definitely want to apply for penalty abatement to see where the process takes you.
If you have reasonable cause for not paying your taxes, there is an above average chance that penalty abatement will work in your favor. The IRS states "Reasonable cause relief is generally granted when the taxpayer exercises ordinary business care and prudence in determining their tax obligations but is unable to comply with those obligations."
In other words, you must be able to show that something beyond your control is stopping you from paying your taxes. Of course, the main question on the mind of many people is: What does the IRS consider to be reasonable cause? Some of the answers include: serious illness, the inability to obtain the proper records, inaccurate advice given direct from the IRS, inaccurate advice from your tax professional or CPA or natural disaster or act of God.
To file for penalty abatement you have three options:
Verbally - This can be done in person at a local IRS office, or by calling the proper party on the phone. Although this is an option, most people don't exercise it because they are not sure of what they are getting into and would rather not jeopardize their chance of success.
Written Petition - Even though the verbal option for filing sounds attractive, the most common is through a written petition. Your petition will go straight to an appeals officer. You should include a formal letter with an introduction to your situation, as well as a request for relief via penalty abatement. You should also include information on why you feel you have reasonable cause for not paying your taxes.
IRS Form 843 - This is a penalty abatement form. You should also include a written letter explaining your situation, such as the petition outlined in option number two.
It is important to note that you cannot submit more than one penalty abatement request for the same situation. This makes it very important to include all of the proper information, details and evidence the first time around. If you are not confident in your ability to file successful penalty abatement, hire the help of a tax professional.
BackTaxesHelp.com has a team of tax experts that can help individuals file for penalty abatement. Please visit our site to request help with penalty abatement.