What is penalty reduction and how can a tax attorney and public accounting firm help you get it?
Posted On June 15, 2021
When you owe back taxes, managing your financial situation can seem almost impossible, as interest and penalties continue to increase while taxes are not paid. However, there are cases where your failure to pay may be due to extenuating circumstances. In certain situations, in fact, you are eligible for a removal or reduction, also known as a reduction, of the penalties you owe for not paying or paying late. Find out what those circumstances are and how you can work with tax attorneys to reduce your overall debt.
Paying taxes on time is the responsibility of all citizens. However, there are certain events that make it almost impossible to keep up with that particular task. The problem, however, is that you still owe your back taxes, as well as interest and penalties on the unpaid amount. However, in certain circumstances, the IRS believes that you have “reasonable cause” for not paying on time, and you may qualify to have your tax penalty reduced or eliminated under the penalty reduction policy. There are different circumstances recognized in a sentence reduction context, including: the death of a close family member, an unavoidable absence (for example, time spent in prison or a rehabilitation center), or inadvertent damage or destruction of your tax records ( eg, loss or damage caused by fire or flood). If any of these events caused you to owe back taxes to the IRS, you may qualify for penalty reduction. Tax attorneys who specialize in tax resolution can be invaluable in helping you determine if you meet the criteria for penalty reduction.
Unsurprisingly, the IRS doesn’t just extend the penalty reduction to everyone who says they qualify. You must provide documentation that supports your reasonable cause claim and you must go through certain channels to even file a claim for penalty reduction with the IRS. This is where having a qualified tax resolution firm on your side is a huge advantage. Tax resolution offices generally have a combination of CPAs and tax attorneys, which means that your tax situation receives the financial and legal attention it needs. These professionals know how the IRS works and what are the most efficient avenues to deal with your situation. In terms of reducing penalties, your tax resolution team of attorneys and accountants will be able to advise you on exactly what you need to collect as documentation and will facilitate communication with the appropriate IRS branch. Rather than having to go through all that red tape on your own, you will have a team of professionals by your side to help ensure you get the benefits you qualify for.
If you owe back taxes due to an extenuating circumstance, you may qualify for penalty reduction. If you think this may apply to your situation, get a tax attorney and accountant from your corner who has experience in tax resolution to help you reduce the amount you owe.