The Internal Revenue Code and most state tax codes, authorize the cancelling of penalties assessed if the taxpayer can demonstrate an acceptable reason that caused the tax liability in the first place.
It is routine for the IRS and State Taxing Authority to automatically assess substantial penalties without investigating whether or not the taxpayer has a legitimate defense to the imposition of the penalties. In many cases, the penalty and interest imposed can exceed the alleged tax and can be financially catastrophic for the taxpayer.
The abatement, or reduction of a penalty assessed by the IRS or state taxing agency is decided on a case by case basis. The IRS or State may be convinced to reduce or even forgive the entire penalties assessed.
Our tax professionals have successfully negotiated the abatement of tens of thousands of dollars of tax penalties assessed by the IRS and State Tax Agencies.
While there may be various options for seeking abatement of penalties assessed or paid, there could be many time deadlines which need to be met to preserve a taxpayer's rights and claims for refunds.
