Tax Penalties Help – What You Need to Know

For American citizens nationwide, April is a month of elevated stress and hardship. Why? Because April 15th is the deadline date for filing tax returns. For many people, filing your income tax returns is a real headache, especially if you aren’t too great with numbers and perhaps aren’t the most organized individual in the world. The good news is that, by hiring professional tax service experts, you need not worry as they handle everything for you. Obviously you pay these wonderful individuals for their trouble, but for many, hiring professional tax services is money well spent. If however, you fail to use an expert and you fall foul of the IRS, you’ll have the taxman to face. Submitting false, late, or incorrect info can lead to tax penalties, and nobody wants that. Here’s a more detailed look at the different forms of tax penalty currently in operation.

Late filing penalties – Each year, as a taxpayer, it is your job to ensure your taxes are filed on time, before the deadline has expired. Fail to do so on time, and you face a late filer penalty. If you file your taxes late, typically you will face a fine of 5% of the total tax owed for the part of the month that is late, or for each month for up to five months, or 25% of the total amount due on the return. So, if for example, for five months you owed $500, your fine would be $125. If, however, it is filed later than 60 days, the minimum you would pay would be either 100% of the tax owed, or $100 whichever was smaller. If however, the IRS believes the late filing is fraudulent, you would pay 15% of the total tax owed for each month, or a max of 75% of the total tax owed.

Timely filers who fail to pay the full amount – If you file your taxes on time, but fail to pay the full amount owed, again, you face a penalty. This penalty is .5% of the tax that is owed for each month where the tax remains unpaid from the unique due date until the total amount is paid. Otherwise, there will be a max penalty of 25% of the total taxes owed, applied and the .5% will increase to 1%.

Frivolous penalties – If a person deliberately submits incorrect details for their tax returns, a frivolous penalty may be applied. This could be as much as $5000.

Penalties for incorrect taxes – If your genuinely made a mistake and paid less tax than you should, the IRS could fine you up to 20% of the amount that you underpaid by. So, as an example, if you underpaid by $100, you could face a penalty of 20%.

How to request penalty abatement – If you wish to request penalty abatement for reasonable cause, you could contact the IRS who may offer administrative relief. You may also wish to speak to a tax professional who will know the abatement processes inside out, and will almost certainly be able to help.

Other administrative relief: If you received incorrect oral advice from the IRS, you may qualify for administrative relief. Make sure you take notes when you call the tax agency.

When requesting an abatement of penalty in writing, provide the IRS or the state other relief arguments, including reasonable cause, to increase your chances of success. The well drafted request should be sent to the IRS or state service center where you normally file your tax return.

If you have reasonable cause grounds for an abatement od penalties, present your facts and circumstances first, then argue and request the abatement on those grounds with reference to IRC codes and case law to support your position. You may need to use the FTA, first time abatement, waiver for a subsequent year, and abatement due to reasonable cause will not disqualify the taxpayer from receiving an FTA.

Get professional help for your tax matter at 877-788-2937.

Client Reviews
Mike has given us peace of mind! He helped negotiate down a large balance and get us on a payment plan that we can afford with no worries! The stress of dealing with the IRS is huge and Mike helped us through it all. The peace of mind is invaluable, thank you Mike! April S.
Mike Habib - Thank you for being so professional and honest and taking care of my brothers IRS situation. We are so relieved it is over and the offer in compromise process went just as you said. Mike is very professional and will give you honest answers to the OIC process and you can really trust him. You won't be sorry you chose him! Joe and Deborah V.
Mike is a true professional. He really came thru for me and my business. Dealing with the IRS is very scary. I'm a small business person who works hard and Mike helped me see that they are not that scary after all. He was always there with the answers I needed and was very good about calling me back which I appreciated since your first reaction is to freak out and ask a million questions. He solved a messy case and worked very hard to resolve it. His rates are VERY reasonable for the amount of work he does! I give him my highest recommendation! Marcie R.
Mike was incredibly responsive to my IRS issues. Once I decided to go with him (after interviewing numerous other tax professionals), he got on the phone with the IRS immediately (as in the same day I signed with him) to squash an impending issue. And he worked directly with them to quickly come to a resolution I am very happy with. I'd highly recommend reaching out to Mike to see if he can help you with any IRS issues. I'm very satisfied! Marshall W.
I’ve seen and heard plenty of commercials on TV and radio for businesses offering tax help. I did my research on many of them only to discover numerous complaints and unresolved tax issues. I found Mike Habib through my own online search and contacted him. He was very professional with great communication, always answering my questions and concerns. Mike resolved my complicated tax problem just as he said he would. I would definitely recommend his services to family and friends. Nancy & Sal V.