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Tax Penalty Reductions

Alabama Tax Penalty Reduction Lawyers

Filing your taxes should be a priority every year. While we understand that it is certainly not fun to sit down and sift through all of your financial statements, the fact remains that the IRS is not an entity you want to irritate. The penalties for filing your taxes incorrectly or failing to file or pay them on time can be both incredibly frustrating and incredibly costly. If you have been notified by the IRS that you owe them money and are facing harsh penalties as a result, you might be able to request a reduction. This won’t be accepted in every situation, but it’s worth speaking to an experienced attorney to determine whether or not you can seek any relief that way.

What is tax penalty abatement?

Tax penalties can, as described above, be quite frustrating and harsh. This means that the individuals facing them often find themselves wondering how they can ever hope to pay the penalty in question and move on with their lives. For these individuals, it’s not about the desire to pay or not pay – the fact of the matter is that they simply cannot afford to pay that fine. When this happens, you might be able to file for a tax penalty abatement.

A tax penalty abatement is, essentially, tax penalty reduction. If you qualify for an abatement, you might be able to lower the amount of penalties that you owe, helping to make your life a little easier while protecting your current and future financial stability.

Who qualifies for tax penalty abatement?

If you are hoping to qualify for a tax penalty abatement, there are certain criteria you must meet. In addition, you must be able to give an acceptable reason regarding why you fell behind on your taxes or failed to pay altogether. This isn’t a mere formality – if you cannot convince the IRS that you had a legitimate reason to fall behind, then you are unlikely to obtain the penalty reduction that you are hoping for.

Some of the reasons the IRS grants penalty abatements include:

  • Misunderstanding Tax Law
  • Natural Disasters
  • Medical Illness (Family or Personal)
  • Reliance on a Professional to File Your Taxes
  • A Death in Your Family
  • Significant Financial Hardship

As you can see, the majority of the above are issues that are provable and are significant enough to justify falling behind on your taxes. If you meet one of the above circumstances, then you might be able to qualify for a tax penalty abatement! Even if you do not, you should reach out to an attorney experienced in Alabama taxes in order to discussion your current situation and potential fixes.

Tax Penalty Abatement – First Time

If you have never been found non-compliant before, or are facing your first tax penalty abatement, then you might be able to request an abatement. Note that this largely depends upon the kind of penalties you are facing. A tax penalty abatement applies to a single tax period, which means that if you are hoping to find relief from penalties accrued from multiple tax periods you should reach out to an experienced attorney to explore other options.

Despite the fact that tax penalty abatement only applies to a single tax period, you could end up saving quite a bit of money if your abatement request is granted. This includes relief from failure to pay and failure to file tax penalties, both of which carry hefty fines. Finally, it should be noted that only individuals with a clean penalty history of at least three years can file for an abatement. If the IRS decides that you have demonstrated payment compliance, they have the option to accept your request and reduce the late-filing penalties you are facing.

Filing for a Penalty Tax Abatement

It is very important that you understand the information you need to provide when filing for a tax abatement. If the request is denied, then you could find yourself facing the full amount of your tax penalties. For this reason, it is a good idea to speak with an attorney skilled and experienced in tax law to help ensure that you have the best chance possible of receiving the abatement that you need.

If you are contemplating requesting a tax penalty abatement, you should reach out to attorneys who can help ensure that your rights are upheld. Lloyd & Hogan, Attorneys at Law, can help. We offer free consultations and are ready and willing to hear about your case. Contact us today for more information.