All You Need to Know About IRS Penalties

The IRS may impose penalties on taxpayers that fail to meet their obligations. There are several reasons a taxpayer may find themself saddled with penalties from the IRS including failure to file tax returns on time, pay taxes on time, submit accurate returns, and furnish the IRS with accurate information. Taxpayers may find relief through IRS penalty abatement by working with a reputable tax attorney with proven experience helping taxpayers with IRS penalties and interest issues. 

Notice of Penalty

The IRS sends a notice by mail to notify taxpayers of the imposition of a penalty. Information contained in the notice explains the penalty and the reason behind the charge. It also informs the taxpayers on the usteps that they can take to be in compliance. In some instances, the penalty will go away if you manage to find a timely resolution to the issue mentioned in the notice. 

Interest on Penalty

The IRS also charges interest on penalties and the date on which such charges come into effect varies depending on the penalty. The outstanding will continue to grow due to the IRS penalty interest until such a time that it is paid in full. 

Types of Penalties

Some of the penalties for which you may receive a notice include: 

  • Information Return 
  • Failure to File 
  • Failure to Pay 
  • Accuracy-Related 
  • Failure to Deposit employment taxes accurately or on time.
  • Tax Return Preparer Misconduct 
  • Dishonored Checks 
  • Underpayment of Estimated Tax 

 

Penalties can be reduced or removed if a taxpayer is able to show good cause why they were unable to be in compliance. Interest on a penalty can only be removed or reduced if there is a similar action on the underlying penalty. 

Last Word

While you can also dispute a penalty if you disagree with the outstanding amount, it is best to avoid it altogether by filing accurate returns, paying your dues on time, and furnishing the IRS with accurate information all the time. Leading tax attorneys in Dallas can help taxpayers with IRS penalty abatement, IRS debt forgiveness, and other IRS debt relief avenues. Search the web for tax attorneys that have a proven record of helping taxpayers with the abatement of penalties and interest, among other relief options and get in touch to discuss your case.