Circumstances that Lead to Penalty Abatement
If you are one of the millions who owe back taxes to the Internal Revenue Service, you know that the amount of money you owe in unpaid taxes can sometime be dwarfed by the amount of penalties levied on top of you for missing deadlines. A thorough research suggests that there’s more than one circumstance leading to the abatement of these penalties. The following are a just a few ways you can get out of being pushed by the tax collector.
Contrary to popular belief, the IRS isn’t heartless. In fact, you can gain penalty abatement on a particular neglected tax return in the event of unexpected life-shattering events. Events such as grave illness or the death of an immediate family member – a spouse or a child, or your own grave illness, or situation such as combating addiction by being in a rehabilitation center are all valid reasons to get penalty abatement. Even those who were incarcerated are eligible for penalty abatement once they serve their debt to society and take vital step of filing any missed tax returns.
Life-Shattering Events Beyond Your Control
In addition to personal tragedy, you can also be eligible for penalty abatement in case you’ve been subjected to life-shattering events that were beyond your control. In the event of natural disaster like an earthquake, tornado, flood or hurricane violently destroying your home or neighborhood, or your place of business that end up wrecking all of your tax return records, the federal government will provide you with some tax relief by waiving those penalties and fees that you owe.
The IRS also accepts other reasons if you file paperwork for penalty abatement. If you fail to receive the W-2 by your employer before the due date on your tax return, your penalties can often get dismissed. Likewise, if you can show that you relied on incorrect or erroneous tax advice from an IRS employee, you can often get any penalties waive as well. Even in situations when you made an honest mistake, and corrected it after filing your return, you may be eligible for penalty abatement. Finally, if you can prove that paying your taxes can create financial chaos for you, dismissal of penalties can be expected, though remember that you’re still liable for paying your taxes eventually sometime. Such situation calls for getting in touch with the IRS and working out an installment plan to make it less stressful on your finances when it comes to paying your debt.