Penalty Abatement

(440) 448-5142

What is Penalty Abatement?

Oftentimes, when people are dealing with the IRS, they think that it is a “no brainer” to get the IRS to “waive” the penalty and interest.  They reason that the penalty and interest are just “scare tactics” used by IRS to get you to pay the tax. Oftentimes, taxpayers approach IRS like they would any other creditor with a “they will be happy to get the amount due” approach.  Far more often than not, they will be disappointed with these results.

The penalties and interest imposed under the Internal Revenue Code are all the product of legislation that was well thought out and designed with specific purposes in mind.  All of these provisions are designed to encourage voluntary compliance and, yes, they can be substantial. The government does not see them as a “bargaining chip.” Rather, the government sees you as owing these penalties and, under the Internal Revenue Code, the penalties, once they are assessed, are treated the same as the tax, meaning that they bear interest as well.

Waiver of interest is available only to those who meet a narrow range of fact patterns spelled out in Section 6404 of the Internal Revenue Code.

Penalty Importance

Penalties are not only a revenue raiser, but an important tool in obtaining voluntary compliance.  Attempting to obtain a waiver of the penalty by calling or by sending a four or five line request, not advisable if success is the goal.  In preparing a request for abatement, it is helpful to have experience in understanding the legitimate role the penalties apply, thoroughly developing the facts and providing relevant administrative and legal authorities.  We can help you achieve your goal.

If you have an assessed or proposed penalty of $20,000 or more, please contact us to see if we can help.