| A small delinquent tax debt can quickly turn into a | | | | (fire, earthquake, flood, etc.), lost or destroyed financial |
| financial nightmare when the government applies an | | | | records, being on a fixed income, etc. Basically, any |
| income tax penalty to what you owe the IRS. | | | | factor that is out of your control that is the direct |
| Penalties and interest increase at a significant rate | | | | cause for not being able to pay the tax debt that you |
| when you are late on the tax debt you owe the IRS. | | | | owe to the IRS. This is what it means to have acted |
| However, if you believe you have acted, honestly, "in | | | | "in good faith" and with "reasonable cause." You are |
| good faith," and with "reasonable cause," your late | | | | not "dodging" your tax (IRS debt). You acted with |
| income tax penalty could be eliminated when you | | | | honestly and with integrity regarding your tax debt, but |
| request an IRS Penalty Abatement. | | | | you were just unable to pay what you owe the IRS. |
| What is an income-tax penalty abatement? | | | | Applying for an income tax penalty abatement |
| Sometimes it's just not feasible for you to pay your | | | | The form you will need to apply for a penalty |
| tax (IRS debt) to the IRS on time. An income tax | | | | abatement on your tax (IRS debt) is Form 843, "Claim |
| penalty abatement is a request to remove all or some | | | | Refund and Request for Abatement." If you are |
| of the penalties and interest on the delinquent tax debt | | | | requesting an income tax penalty abatement on a joint |
| that you owe the IRS. On average, an income tax | | | | return, both you and your spouse must sign it. Once |
| penalty makes up approximately a quarter of the total | | | | received, your application will be reviewed by an |
| tax (IRS debt) owed. Most times, individuals become | | | | Officer whose sole discretion it is to make the final |
| capable of paying the original tax debt they owe the | | | | decision on your tax debt and what you owe the Fed |
| IRS. It's just that the income taxes' penalty is way too | | | | IRS. Therefore, be sure to include all supporting |
| much. In 2005 alone, the IRS issued an income tax | | | | documents and to keep a copy of all information for |
| penalty of over $15 billion to taxpayers. Don't let the | | | | your records. If you decide to apply for an income tax |
| government bully you into paying more than you owe | | | | penalty abatement, you should be able to, at the very |
| the Federal IRS. Just because you have a tax (IRS | | | | least, pay your delinquent tax (IRS debt) in full without |
| debt) doesn't give them reason to take advantage of | | | | the penalties and interest. |
| you! | | | | Dealing with the IRS can be a very emotional and |
| Examples of good applicants for an income tax's | | | | frustrating time when you have a tax (IRS debt). For |
| penalty abatement | | | | this reason, you should always consult a tax debt |
| Life happens. Everyone knows that. Maybe you had a | | | | professional when you seek an income tax penalty |
| death in the family, or maybe you received bad tax | | | | abatement. What you legally owe the IRS and the |
| debt advice from a tax (IRS debt) professional you | | | | amount the IRS would like to get from you can be two |
| thought you could trust. You should not be held | | | | completely separate things. It is always a good idea to |
| accountable for an income tax penalty in these | | | | have a tax debt professional on your side that can get |
| circumstances. Other situations include natural disasters | | | | your situation resolved quickly and efficiently. |