The IRS has strict penalty policies and penalties can be 20% of the tax liability, depending on the situation.
Among the common penalties are:
- Failure to File Penalty
- Failure to Pay Penalty
- Failure to Prepay Tax Penalty
- Accuracy Related Penalty (results from audits)
If you had reasonable cause for not filing timely, not paying timely, an inaccurate tax return, etc. - you may qualify for a penalty abatement. Reasonable cause can be anything from medical issues to bad advice from a tax professional.
The Internal Revenue Manual (IRM) lists all reasonable causes that the IRS will accept when reviewing a penalty abatement request. We know the IRM very well and can cite sections related to your unique situation, proving to the IRS that you qualify for a removal of penalties.