Tax Penalties & Interest
Tax Penalties and Interest Can Double Your Tax Bill Over Time
The taxing authorities penalize millions of taxpayers each year. They have so many tax penalties that it’s hard to understand which penalty they are hitting you with. The most common tax penalties are: Failure to Deposit; Failure to File; Failure to Pay. All of these tax penalties can substantially increase the amount you owe the IRS or State in a very short period of time. To make matters worse they charge you interest on penalties.
Many taxpayers often find out about tax problems many years after they have occurred. This causes the amount owed to be substantially greater due to tax penalties and interest.
Some IRS penalties can be as high as 75%-100% of the original taxes owed. Often taxpayers can afford to pay the taxes owed, however the extra tax penalties make it impossible to pay off the entire balance. The original goal of IRS imposing tax penalties was to punish taxpayers to keep them in line. Unfortunately they have turned into additional sources of income for the IRS.
Tax penalties can be abated. Therefore before you pay any penalty amounts, call Rockwater Associates and we can determine whether you qualify for IRS tax relief through a tax penalty abatement.
The IRS and the State have broad powers when it comes to Seizure of Assets. These powers allow them to seize personal and business assets to pay off outstanding tax liabilities. This occurs when you have been avoiding them. The taxing authorities attempt to collect amounts owed with a seizure as the ultimate act of their collection efforts.
How to Qualify for an IRS Penalty Abatement
Tax Penalties can be abated. To qualify, you must be in compliance with your tax returns and your payments to the IRS. To meet the filing compliance requirement, you must have filed or filed an extension for all required returns and have no outstanding request from the IRS. This means if you need to file a certain year’s tax return, you must file it before you can request a penalty abatement.
To make sure you are in compliance with your payments, you must have paid or arranged to pay any tax due. You can be approved for an installment agreement and also submit a request for a penalty abatement if your payments are current. And lastly, to qualify you must have a clean penalty history. This means you cannot be eligible for a penalty abatement if you had any penalties for the previous three tax years.
Get IRS tax relief through a tax penalty abatement, call us for a free tax consultation at (855) 880-1088.