penalty relief | Nesteggg Accounting

Questions about tax payments and penalties come up all year long. Taxpayers can find most answers to these questions on IRS.gov. They can head over to the Let Us Help You page, which features links that take users to information and resources on a wide range of topics related to penalties and payments.

Payments

Payment options

This page lays out the different way taxpayers can pay what they owe, from having the payment taken directly from their bank account to using a credit card.

Payment plan

Taxpayers who cannot pay what they owe in full have options, which are explained on this page.

View your balance and payment history

Individual taxpayers can use this tool to check their account and see things like their payoff amount.

Liens and levies
These links explain what a lien and a levy are, and how taxpayers comply with them.

Resolve a dispute
The Office of Appeals is an independent organization within the IRS that helps taxpayers resolve their tax disputes. This page has links to information that will help taxpayers who received a notice saying their case qualifies to be reviewed by Appeals.

Office of Appeals

Prevent future tax bill
Taxpayers who owed more than expected when they filed this year have a couple options to help them avoid that when they file next year. These pages have more info about the options.

Penalties
These links take the user to information where they can find out more about topics related to penalties and penalty relief.

Here’s what taxpayers should know about penalty relief

Taxpayers who make an effort to comply with the law, but are unable to meet their tax obligations due to circumstances beyond their control may qualify for relief from penalties.

After receiving a notice stating the IRS assessed a penalty, taxpayers should check that the information in the notice is correct. Those who can resolve an issue in their notice may get relief from certain penalties, which include failing to:

File a tax return
Pay on time
Deposit certain taxes as required

The IRS offers the following types of penalty relief:

Reasonable cause
This relief is based on all the facts and circumstances in a taxpayer’s situation. The IRS will consider this relief when the taxpayer can show they tried to meet their obligations, but were unable to do so. Situations when this could happen include a house fire, natural disaster and a death in the immediate family.

Administrative Waiver and First Time Penalty Abatement
A taxpayer may qualify for relief from certain penalties if he or she:

Didn’t previously have to file a return or had no penalties for the three tax years prior to the tax year in which the IRS assessed a penalty.
Filed all currently required returns or filed an extension of time to file.
Paid, or arranged to pay, any tax due.

Before asking for First Time Abatement relief, taxpayers can request that the IRS first consider the reasonable cause relief provision. This preserves access to the First Time Abatement, which taxpayers may only use every three years.

Statutory Exception
In certain situations, legislation may provide an exception to a penalty. Taxpayers who received incorrect written advice from the IRS may qualify for a statutory exception.

Taxpayers who received a notice or letter saying the IRS didn’t grant the request for penalty relief may use the Penalty Appeal Online Self-help Tool.

More Information:
Common Penalties for Individuals
Penalty Relief
The Right to Pay No More than the Correct Amount of Tax
The Right to Challenge the IRS’s Position and Be Heard
The Right to Appeal an IRS Decision in an Independent Forum

Taxpayers can go to IRS.gov for answers to questions about payments and penalties

Here’s what taxpayers should know about penalty relief

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