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When taxes are not paid or filed on time, the IRS and California tax authorities may assess penalties and interest. Over time, these additional charges can significantly increase the total balance owed.
Understanding your options for penalty relief requires careful review of the underlying facts, tax history, and applicable IRS rules.
Tax penalties may arise for several reasons, including:
A penalty may be assessed when a required tax return is not filed by the due date, including extensions.
If taxes are not paid by the deadline, the IRS may impose a failure-to-pay penalty in addition to interest.
Substantial understatements of income or improper deductions may result in penalties, typically calculated as a percentage of the underpaid tax.
In cases involving willful tax fraud, the IRS may assess a civil fraud penalty, which can be substantial.
Penalty amounts and interest rates vary and are subject to statutory limits and periodic adjustments.
Interest accrues on unpaid tax from the due date of the return until the balance is paid in full. The IRS interest rate is determined quarterly and is based on federal short-term rates plus a statutory percentage.
Interest generally continues to accrue even if penalties are reduced, though certain penalty abatements may lower the overall balance.
Taxpayers may request penalty abatement in certain situations. The IRS may consider relief based on:
• Reasonable cause (e.g., serious illness, natural disaster, records destroyed)
• First-Time Penalty Abatement (FTA), if eligibility requirements are met
• Administrative error
• Other qualifying circumstances under IRS guidelines
Approval is not automatic and depends on documentation and compliance history.
The California Franchise Tax Board (FTB) also imposes penalties and interest on unpaid state tax liabilities. Relief procedures differ from federal IRS processes and require separate review.
Tenina Law reviews IRS and California tax penalty notices to determine whether:
• Penalties were properly assessed
• Eligibility exists for First-Time Abatement
• Reasonable cause arguments may apply
• Alternative resolution options should be considered
Each case is evaluated based on individual facts and applicable law.
If you have received an IRS or California tax penalty notice, Tenina Law can review your situation and discuss potential options for relief.
We assist clients in preparing penalty abatement requests, responding to deficiency notices, and communicating with federal and state tax authorities.
Consultations are provided at no charge. Representation terms are discussed in advance.
Attorney licensed in California with over 20 years of legal practice in civil litigation, tax law, bankruptcy, and corporate matters. Each case is evaluated on its facts and applicable law.
We provide personalized attention, clear communication, and ongoing case evaluation. Client experiences vary based on the circumstances and results depend on case-specific facts and applicable law.