Can IRS penalties be removed?
Short answer: Often, yes. First-time penalty abatement removes failure-to-file and failure-to-pay penalties for one year if your record for the prior three years is clean.
The IRS removes penalties in two main ways:
- First-time abatement: for failure-to-file, failure-to-pay and failure-to-deposit penalties when you had no significant penalties in the prior three years, have filed all required returns, and have paid or arranged to pay the tax.
- Reasonable cause: when something outside your control, such as serious illness, a disaster or bad advice from the IRS, kept you from filing or paying on time.
Interest on the tax itself generally is not removed, but interest charged on an abated penalty comes off with it.
Many people pay penalties they could have had removed. We check for abatement on every IRS case we take.
General information from Davis Schuler & Associates, LLC, not advice for your situation. Tax rules and thresholds change; confirm the current rules before acting.
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