The IRS offers taxpayers a tax debt relief option known as an IRS Taxpayer Release. During an audit by the Internal Revenue Service, taxpayers may be asked to provide information and pay a large fine if they choose not to comply with the conditions of their Release. If you meet certain requirements, you can avoid jail time, large fines, and other consequences by choosing not to contest your Release. If you do contest your Release, the IRS will demand restitution for the back taxes and interest, plus a possible further suspension or temporary loss of benefits.
When you choose IRS Taxpayer Release, the IRS will determine whether you met all of your tax year requirements. The IRS will then give you a notice detailing all of your due payments, including the due taxes, penalties, interest, and other additional amounts. The IRS may also grant you an FTA to ease taxpayers from default-to-fault, failure-to-finance, and failure-to-reimburse penalties (the terms of each vary). However, despite the many benefits of IRS First Time Penalty Abatement, very few taxpayers who qualify request it during a tax year audit.
One of the main reasons most taxpayers request an IRS penalty abatement is because they believe that they cannot afford the high fees associated with IRS tax services. In order to qualify for an IRS Taxpayer Release, you must be able to prove that you cannot afford the penalties that will be assessed if you do not settle your IRS Installment. An IRS Installment is a fee that is assessed when you choose not to settle your tax year tax debts. If you are assigned an IRS Installment tax, services are not a good choice.
Taxpayers often request IRS First Time Penalty Abatement after being assigned a penalty for their first-time late filing. Late filing is an example of tax debt. The penalties often include interest and penalties on the basis that you were not informed that you owed the tax debt in full. Because you did not receive a formal notice that your tax debt was not paid in full, the IRS claims that you did not incur interest or penalty. However, many taxpayers can prove that they did incur such penalties.
If you are assigned an IRS Installment penalty, you might ask for an IRS extension. Extensions are only available if you have experienced financial hardship, such as a death in the family, a reduction in earnings, or a divorce. You also may qualify for an extension if you paid part of your tax debt in cash or incurred a tax debt that exceeds the maximum amount that you are allowed to be charged. However, you may also be required to pay the full amount, even if you meet the other requirements.
Some taxpayers also request IRS Installment penalty abatements based on “reasonable cause.” Reasonable cause is defined as acts or omissions that were considered reasonable in the circumstances. Examples of reasonable cause could include paying your taxes on time or not acting in bad faith. If you met one of these requirements, but the IRS pursued you for the penalty, you might be able to get the penalty waived.
In order to qualify for IRS Installment penalty abatements, you must fill out an “IRS Installment Abatement Request,” which is available online. Your tax year starts with the first year you do not meet the conditions described above; in this case, you would need to wait three years. Once you have met all of the conditions listed above, you will be allowed to apply for IRS Installment Relief. In order to apply for the IRS Installment Relief, you must either mail in the forms electronically or download them from the IRS website. The forms are then printed out and mailed to the IRS.
You must also complete an Offer in Compromise (OIC) and attach any relevant documents to support it. Once you have applied, you will receive a letter from the IRS notifying you that you have been approved for an IRS Installment Relief. It is important to remember that you may still be eligible for penalty abatement if you do not meet all of the conditions listed above. To find out more about IRS Taxation relief or to apply for it, visit the IRS website. For more information on IRS First Time Penalty Abatement, contact IRS Help Attorney now.