Will the IRS forgive penalties and interest?

Can the IRS Forgive Penalties and Interest?

The Internal Revenue Service (IRS) understands that taxpayers may face circumstances beyond their control that prevent them from timely filing and paying their taxes. In such cases, the IRS may consider waiving penalties and interest, providing taxpayers with much-needed relief.

First-Time Abatement

First-Time Abate is an IRS program that allows first-time taxpayers to request a one-time penalty waiver. However, if you fail to qualify for this program, you may still be eligible for penalty and interest abatement under the following circumstances:

Reasonable Cause

The IRS considers reasonable cause to be an event or circumstance that prevented you from meeting your tax obligations on time. Some examples of reasonable cause include:

• Serious illness or hospitalization
• Natural disasters or other emergencies
• Loss of records or tax documents
• Unavoidable military deployment
• Death of a close family member

Demonstration of Reasonable Cause

To demonstrate reasonable cause, you must provide sufficient documentation to support your claim. This may include:

• Medical records
• Proof of lost or stolen documents
• Military orders
• Death certificates

Intentional Negligence

The IRS will not waive penalties and interest if it determines that your failure to file or pay on time was due to intentional negligence. Intentional negligence includes:

• Ignoring tax bills or notices
• Deliberately filing late or incomplete tax returns
• Failing to timely gather necessary information
• Making no effort to seek professional assistance

How to Request Abatement

To request abatement of penalties and interest, you must submit a written request to the IRS. Your request should include:

• Your name, address, and taxpayer identification number
• The tax year(s) involved
• The penalty and interest amounts you are requesting to be waived
• A detailed explanation of your reasonable cause

Evaluation Process

The IRS will review your request and supporting documentation. If they determine that you have demonstrated reasonable cause, they may grant abatement of the penalties and interest.

Conclusion

While the IRS generally assesses penalties and interest on late filings and payments, they are willing to consider waiving these penalties in cases of reasonable cause. By providing sufficient documentation and demonstrating that your delay was not intentional, you may be eligible for penalty and interest abatement, easing the financial burden and providing you with much-needed relief.