Thursday, January 1, 2009

Penalty Abatement


If you have received a notice from the IRS for taxes due, it may include penalties and interest. The IRS does not abate interest (unless they made an error), but they do, in some circumstances abate penalties. To have penalties abated on your tax liability you need to request this abatement in writing. You need to state the reasons why you either did not file or pay your taxes on time.

Explain that it was not due to willful neglect, but due to the reasons you will explain. You need to attach documents to substantiate what your reasons are. Keep in mind they will only accept major issues that affected your entire life, not just your taxes. If everything else in your life was handled, and your taxes were the only item you could not take care of, they will not abate penalties.

If you had a death of a loved one, a major illness or addiction that affected all aspects of your life, they may abate the penalties. Be sure to include a timeline of events that shows you life was in turmoil when you taxes were due to be filed or paid.


If you need assistance in handling your abatement, contact an Enrolled Agent.

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