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The two main IRS civil penalties assessed are: failure to pay (late payment) and failure to file. Both penalties have a maximum amount of 25% (50% for both) of the outstanding debt. The good news is the IRS civil penalties can be reduced or eliminated.
While there are others, the two most common abatement programs are:
The first time penalty abatement is one of the more common abatement programs our clients use. The first time penalty abatement program is designed to help those who have filed and paid their taxes on time for the previous three years and find themselves for the first time in a delinquent status. Read more
The reasonable cause penalty abatement program is designed to assist delinquent taxpayers who have attempted to be compliant, but have fallen short.
Whether or not you use the first time penalty abatement or one of the other abatement programs, our system will help you with an IRS civil penalty by:
Sometimes you can resolve your IRS civil penalty without having to go through the added steps of submitting a penalty abatement request. A penalty abatement request for an IRS civil penalty plays a more significant role when you are attempting to pay the full balance of your delinquent taxes. When you want to pay your balance in full, your objective should be to lower your balance with the obvious result of your having to pay a smaller balance.
For the majority of taxpayers who have a delinquent account, their goal is to resolve their back taxes for the less than the full amount owed. If this is also your goal, then you may be paying only a fraction of what is actually due. If this is your approach to tax resolution, then a penalty abatement many not be needed. The example below further clarifies this approach to tax resolution.
| Delinquent Taxes Owed: | $30,000 |
| Interest: | $2,700 |
| Penalties: | $7,500 |
| Total Tax Bill: | $40,200 |
| Approved Monthly Payment Plan: | $200 |
| # of months IRS can collect: | 36 |
| Total Monthly Payments: | $7,200 |
In this example, the taxpayer has opted to use the Installment Agreement program to resolve his/her tax debt. The taxpayer has been approved for a $200 a month payment and the IRS has only 36 months to collect for a total of $7,200.
In this scenario, if the taxpayer decided to use the first time penalty abatement program and they were successful having their IRS civil penalties abated, the total delinquent tax bill would be reduced by $7,500, therefore, making the outstanding balance $32,700. Even though the taxpayer qualified for the first time penalty abatement program and was granted the abatement, it does not change how much will be required to be paid back. Therefore, a penalty abatement request might be deemed unnecessary.
The important thing is for you to be sure you understand the process and your options. Then and only then can you know what the best path for tax resolution is for you. The example above used these key tax resolution components/strategies:
We show you in a simple format how to use these strategies/components and many more, to not only to deal with an IRS civil penalty, but with all your tax resolution needs. Than we assist you in completing the correct paperwork so that you can resolve your taxes, not only for the least amount possible, but in a stress-free way as well.
Pre-Qualification
We encourage you to try our Free Pre-Qualifier so that you can make sure you are a good candidate for our tax resolution program, the Resolution Assistant. Again, it’s FREE and we don’t ask you for your credit card, date of birth or social security number.
