Tax Penalty Abatement - How to Avoid Tax Penalties
One of the most common complaints from delinquent taxpayers is snowballing tax penalties and interest. This problem can quickly escalate, as your accumulation can double the amount of tax owed very quickly.
Current IRS rules allows for tax penalty abatement (removal) of tax penalties and interest or a refund when there were extenuating circumstances contributing to this problem, or if you had a good reason for falling behind in the first place. In order to accomplish this, you will have to show the IRS that you had "reasonable cause" for not paying taxes.
What qualifies as reasonable cause? It depends on the circumstances involved in your situation. The IRS procedures for deciding who qualifies for a penalty abatement and for what reason seem to differ in each case. The following are just a few circumstances under which you can qualify for penalty abatement. This is not a complete list, it is only a list of some of the most common reasons.
- Embezzlement or theft.
- Fire, flood, windstorm, riot or other disaster beyond your control.
- Bad accounting advice.
- Serious health ailment.
- Serious health ailment of a family member.
- Death of a close family member
OMNI must also show the taxing authorities that you showed "due diligence" and "no neglect" in attempts to repay the debt. We describe to the IRS exactly what efforts were made to repay the debt. If OMNI shows a consistent or significant effort in this regard it's often enough to recoup all, or a significant portion of your tax penalties.
To find out if you qualify for a tax penalty abatement, call OMNI Financial today for a free consultation at (800) 540-0433.