Tax Penalty Abatement Attorney

Jin Kim
Free Consultation
(916) 299-9913

It’s no secret that tax penalties and interest can lead to significant tax debt. However, a skilled tax penalty abatement attorney can help reduce your tax debt. If you have received an assessment of interest and penalties call tax attorney Jin Kim at (916) 299-9913 for a free consultation. She can negotiate with the IRS, FTB, CDTFA, and Sacramento County Tax Collector and determine whether you qualify for a tax penalty abatement program.

Tax Penalty vs. Interest Abatement

Most people know that back taxes can grow with interest, but some don’t realize that back taxes can also result in penalties. Unfortunately, penalties are common when it comes to IRS audits. If you’re going to be assessed with a tax bill, there’s a high chance it’ll include an added penalty. There are ways, however, to remove the penalty from your tax bill. It won’t remove the total assessed amount, but at least it’ll decrease some of the financial burden.

Since interest is mandated by Congress it’s rarer to get an abatement when it comes to accrued interest with the IRS, but it can happen with other tax agencies such as in the case of California FTB request for abatement of interest. (See FTB 3701)

Why Does My Tax Bill Have A Penalty?

Penalties are often added by the IRS if you get a tax bill at the end of your audit. A tax bill means that you owe the government money, and the penalty is intended as a form of punishment for depriving the government of that money. Penalties are also intended as a deterrent. The government doesn’t want people to get lax about violating tax laws and this is one way of ensuring this goal. While people might have many different valid reasons why they incurred the penalty, the government rarely takes these reasons into consideration when they compute taxes. However, you can use these valid reasons to have the penalty removed or abated.

There are actually different types of penalties. When you’re assessed for additional taxes, there will be an explanation as to why you owe the government this money. For example, the most common is that your tax returns were inaccurate; you under-reported your income. It could also be as simple as the IRS not believing your justifications for the deductions you claimed. For cases like this, the IRS will add on what is called an ‘accuracy penalty’.

If the IRS finds proof of fraud, penalties will be among your many worries. Fraud penalties are especially high, as they can reach up to 75%. Don’t panic though if you made a huge mistake on your tax return – so long as it wasn’t done intentionally, it’s unlikely to be considered fraud.

How Can I Get Rid of the Penalty?

There are ways to remove penalties from your tax bill, but it’s not always a guarantee that the IRS will grant your request. There’s no harm in trying, however – you won’t be punished for asking. The proper term used by the IRS when removing penalties is abatement. In order for the IRS to abate the penalty, you must provide ‘reasonable cause as to why your penalty should be abated. The reasonable cause you provide must be believable and of a serious nature, and it helps if you have supporting documents for it.

Reasonable Cause

Some of the most common accepted reasonable causes, taken from the IRS Manual, are the following:

Death or Serious Illness – The death or serious illness, in this case, should refer to either the taxpayer or the taxpayer’s immediate family. Corporations and estate can also avail of this reason, provided that the death or serious illness affects the person who has sole authority to make or deposit tax payments.
Destruction of taxpayer’s business or records. Fire is the most commonly accepted reason, but other reasons for the destruction may be accepted as well.
Unavoidable absence of the taxpayer
The taxpayer was unable to determine the tax due because of reasons beyond the taxpayer’s control.
Lack of funds despite your best efforts. If you simply didn’t have the money to pay your tax bill at the time, this is also an acceptable reason. You have to prove, however, that this lack of funds was despite your best efforts.
Other explanations may also be accepted by the IRS.

Free Consultation

To learn more about tax penalty abatement call tax attorney Jin Kim at (916) 299-9913 for a free consultation. She can determine whether you qualify for tax penalty abatement and help you reduce your total tax liability.