As debt relief lawyers, we know that owing the IRS money is always a stressful, and usually financially overpowering event. The tax penalties the IRS can charge can be daunting and can mount up very quickly, if you do not attack the issue professionally and immediately. Also, you may be able to qualify for relief, if you have tried to comply, but simply were unable to meet your current tax obligations.
Not all penalties levied by the IRS are eligible for relief, but some are, such as:
- Failing to pay the penalty on time
- Failing to file a tax return
- Failing to deposit specific taxes as may be required
- Other penalties as applicable to IRS rules
Your Plymouth or Hyannis IRS relief lawyers will be able to help you take advantage of all the relief that the IRS laws provide. Each IRS relief case is different and will have to be approached as such. The quicker you get the advice you need, the better it will usually work out for you.
Some of the types of penalty relief are:
Relief Due to Reasonable Cause: This relief is based on the facts and circumstances in your situation. The IRS will usually consider any reason which establishes that you used all ordinary business care and prudence to meet your federal tax obligations but were nevertheless unable to do so.
Administrative Waiver & First Time Penalty Abatement: These waivers may apply if you did not previously have to file a return or you have no penalties for the three tax years before the tax year in which you received a penalty. Also, if you filed all currently required returns or filed an extension of time to file, or if you have paid, or arranged to pay, any taxes due.
Statutory Exceptions: This exception applies if you have received incorrect written advice from the IRS. It can also apply if you feel you have assessed a penalty as the result of erroneous written advice you received from the IRS. Some or all the following items may be needed when requesting penalty relief:
- You need to prepare a written response
- Detail the faulty information or advice that you received from the IRS
- The report or information regarding tax adjustments identifying the penalty or addition to tax, and the item(s) relating to the erroneous advice.
There are other exceptions, and the details of your case will allow your IRS relief lawyer to use the defense that best meets your needs.
What are the Possible Consequences of Not Paying Taxes or Penalties?
The IRS can be relentless in getting your back-tax payments, penalties, and interest due paid, and they have many legal ways to do it.
Some of the significant legal consequences you may face are:
- Issuing a bank levy and taking your bank or savings accounts
- Possibly obtaining your social security payments
- Taking steps to take your accounts receivable
- Place tax liens on your property
- Charge you added fees and interest for late penalties
- Garnish or levy your wages
- Hold or acquire your insurance earnings
- Seize real property, and in some cases, your residence
As you see, these examples are severe and can disrupt your life and the lives of your family and employees.
Time is of the essence in any situation where you have back taxes, penalties, or interest because the IRS practice is to send you time-sensitive legal notices to make you pay. Such IRS notices carry these severe consequences, if you do not respond or comply with them in a timely and professional manner. Your IRS relief lawyer is fully aware of how the IRS works and proceeds, and can help you deter or mitigate what the IRS does and how their actions affect your life.
What Are Some of the First Steps to Take When Dealing With Tax Penalties?
If you owe money to the IRS, the debt may never really “go away.” If you have incurred penalties, there are things you and your tax relief lawyer can do immediately.
Look into the abatement and see if your circumstances could qualify you for it. Many things can happen, such as a death in the family, severe illness, damage caused by severe weather or fire, and more. These things are out of your control, and the IRS may accept them and ease the burden of your penalty.
Gather all the proof you need and supply it to your IRS relief lawyer. For example, if you live in a federally declared disaster area, the IRS may be offering residents penalty waivers. You would gather proof that you are a resident of the area. If your reason for not paying is because you spent time in the hospital, then your medical bills or reports can confirm the dates.
Make your waiver request in writing and get it to the IRS. Your IRS relief lawyer will put forth and document the reasons you were not able to pay. Your attorney will make sure they get to the proper IRS department or individual and that the information is handled expeditiously.
What If the IRS Refuses My Request for Relief?
The IRS usually has 60 days to respond to any request for relief. If you and your IRS relief attorney have submitted all documents needed and in the proper form, the IRS may still deny your request. It is within your rights to appeal their decision, and you certainly should do so.
More information can be supplied to them, and you can ask the IRS to reconsider the relief. If that doesn’t help, you can appeal to reduce certain penalties and/or fines imposed. So, you do have options, but do not be surprised if you must appeal. IRS relief lawyers will work tirelessly to settle or reduce your debt. This could save you and your business tens of thousands of dollars and years of stress.