Many times it’s not the back taxes that are the real problem. The penalties and interest compounded over many years can create an insurmountable tax debt, which sometimes even bigger than the initial amount owed. This is usually as a result of waiting too long thinking that the problem will go away, all the while it gets much worse. The penalties and interest are usually due to:
Underpaying: The IRS has ways of determining who may have paid less than they were supposed to – this is an inexcusable offense and the penalties can be significant . perhaps as high as 20% interest.
Filing a Late Return: There is a good reason why we have the fixed date of April 15 for filing of returns. If we didn’t, many more people would be paying late. You should know that even a one day delay could trigger the IRS penalty for late filing. You could be responsible for 5 to 25% interest levied as your penalty.
Hiding Property and Gift Taxes: Most tax payers are not aware that monetary gifts need to be taxed. Of course, the same goes for property taxes . there’s no way of getting around this either. These gifts must be shown when filing your return. If you don’t, you could face a penalty of between 20 to 35%.
Tax Fraud: Any kind of purposeful tax deception can mean a penalty of up to 75%.
When submitting a petition for “an abatement of penalties,” the taxpayer needs to have ‘reasonable cause’ and must be able to explain why the IRS should grant the penalties to be removed.
At Tenina Law, Inc., we have years of knowledge and experience with penalty abatement. Dealing with tax issues are extremely complicated and stressful . you need a tax lawyer who specializes in tax law and has experience in helping people get rid of their IRS problems.