Video instructions and help with filling out and completing Form 843 Penalties

Instructions and Help about Form 843 Penalties

IRS penalty abatement what is it and how do you get it well you know IRS penalty abatement is something that needs to be looked at in just about every case in every IRS problem resolution case unless of course you're going to resolve the case either through full payment in which case well apparently well if you think about it full payment you might still want to do penalty abatement bankruptcy so if you're gonna discharge the entire liability including the penalties then penalty abatement probably doesn't make a whole lot of sense so you probably wouldn't want to bother with it then in the other the third option in which penalty abatement would not be appropriate would be when you're going to settle the entire case through an accepted offer and compromise otherwise penalty abatement is a viable option probably for just about every IRS problem resolution case so if you're gonna enter into it an installment agreement we're gonna make monthly payments or periodic payments or you're gonna be in hardship status in which the IRS indicates that they're not going to be seeking collection from you but that interest in penalties will continue to accrue it might be smart to go ahead and request a penalty abatement and again like I iterated a minute ago if you're gonna pay in full it might still make sense to request a penalty abatement now penalties can be used for both personal and payroll taxes the criteria for penalties to be abated is the reasonable cause standard now what does reasonable cause mean it means that despite the fact that the taxpayer exercised ordinary business care and prudence that something unforeseen occurred and therefore caused the failure to file or the failure to pay the tax to occur and so that's you have to offer some a reasonable explanation that or why the penalties or why the penalty shouldn't be paid and why they should be abated you have to offer a reasonable explanation for why the taxes weren't filed and/or weren't paid on time now what I would suggest that you do is you write out a narrow explaining why exactly you feel that you have reasonable cause and couch it in terms of that ordinary business care and prudence standard so there was a hurricane for example and therefore I was unable to file and pay my taxes because all of my business records were lost when my house was destroyed that's a pretty good reasonable cause explanation now it's important to note that as the as the duration or the timeframe for the failure to comply enlarge is it becomes harder and harder to actually achieve penalty abatement what do I mean by that well if you have a track record of ten years of not filing and or not paying your taxes not making estimated tax payments for example then it's probably unlikely you're gonna get any penalty of payment why because despite the fact that a hurricane hit your house and now you have a blue tarp on top of it you weren't gonna file and or pay your taxes anyway that's the sort of rationale and argument they're gonna get back from the IRS so if you can combine it to a year or two or three or even four maybe then you probably have a better explanation of reasonable cause the the timeframe that we indicate that it takes for a penalty abatement here responses sometimes something like 90 days to 180 days oftentimes you will receive a letter back from the IRS which indicates that you must full pay the taxes before before they will consider your abatement request and they indicate that that's what the law says well that's incorrect so if you get that and you don't feel like you want to go ahead and file the taxes or pay the taxes in full rather then don't do it go ahead and write back a fairly strongly worded letter that says no that's not what the law says please consider my request anyway because of course if you're in an installment agreement or something and you're paying it out over a period of many years it's going to take many years for the taxes to be paid before they're before they will consider your penalty abatement request and in my opinion the older and the more stale that your request gets then the less like idiot less likely it is they're actually going to accept it so I just wanted to point that out what you need to do is send your request via certified mail return receipt requested to your service center wherever that if you're in Florida for example you send it to the service center IRS service center Atlanta Georgia 3 9 9 0 1 there's of course a lot of different service centers around the country you're also going to want to make sure that you send it attention penalty abatement coordinator that might help it get found if you send your penalty abatement request straight to the service center without certified mail it will most likely end up in a garbage can someplace if you are actually dealing with a revenue officer instead of something like a CS or some you know some automated section of the IRS then you're going to want to send your penalty abatement request straight to the revenue officer now a little trick that they like to take to play on people is they'll say your penalty abatement request I'm not gonna accept it as a penalty of ami request because you dealt with too many different topics in the letter so if you're going to request penalty abatement from a revenue officer what I want you to do is write on the letter this please consider this letter a formal request for a penalty abatement and go ahead and list out your facts and circumstances and why