E very year on April 15, thousands of Americans end up owing additional tax money to the IRS. While most Americans try to pay their taxes each year, uncontrollable circumstances sometimes make it impossible to pay your tax debt on time. If you lost your job or faced a medical crisis and now you can’t afford to pay your tax bill, you aren’t alone. The IRS estimates that nearly 17% of taxes that are owed this year will not be paid at all. If you have faced a lengthy battle to get caught up on your tax debt or you owe a large chunk of money, you will accrue a massive amount of interest and penalties in a short window of time. The good news is that the IRS offers a program for penalty abatement to reduce the overall amount you owe and make it a little easier to dig your way out of tax debt once and for all.
” If you owe back taxes and have a steep amount of penalties that have accrued over time, contact a tax attorney. If you can prove that you didn’t pay your tax bill because of extenuating circumstances, your attorney will be able to negotiate to have your penalties reduced or even erased all together.
What qualifies as extenuating circumstances that make you eligible for penalty abatement? There are actually quite a few things that could make you a good candidate. Did you have a loved one die recently? Did you face significant financial challenges as a result of that death? If you can provide proof with a death certificate and financial documents that show your losses, you will likely be eligible for penalty abatement.
Another reason that your IRS penalties may be canceled is if you were physically unable to pay your debt. This could include being in prison or in a rehab facility where you were not able to file your taxes on time. Again, you would need to have a lot of supporting evidence to prove your story. If you have doctor’s slips, hospital bills or even documentation from a court then you would need to be able to submit this to the government as you try to have your penalties removed.
You never really know when you might face a natural disaster. This could include a flood or even a fire. When situations like this occur it may be completely impossible for you to file your taxes on time. You will want to contact the government as soon as possible and ask for an extension. Also, discuss the penalties that you might be facing. Determine what you will need to do in order to have these removed when you finally do have an opportunity to file your taxes.
Believe it or not, you might encounter a situation where you have received bad information from someone that works for the IRS. If you did not file your taxes on time because of something that an IRS employee told you then you will most likely be able to have your penalties removed. Be sure that you have documentation related to what you were told. If you have the date, time and name of the person that you spoke to then this will be very helpful as you try to prove your case. If you received anything in writing from the IRS giving you an extension then you should provide this as well.
If you are facing a mountain of tax debt including penalties and interest, contact a tax attorney today and ask for additional information on penalty abatement programs.