Everyone hates tax time. It doesn't matter if you get a refund or not, because the time before you worries about penalties and possible interest due. While there is never a way to make taxes non-stressful, there are ways to make it less stressful. If you need IRS tax help regarding interest and penalties, keep reading for some helpful tax advice.
One thing most people don't realize is that 1/3 of all tax penalties can be reduced. This means that any perceived penalties that you may incur have the option of being reduced or even waived. The only thing you have to do is show that there is a "reasonable reason" for the government to lower the sanctions. Here are some examples of what the IRS considers good excuses:
1. Inevitable absence.
2. Serious illness or death of the taxpayer or his immediate family.
3. Inability to determine taxes for reasons beyond the control of the taxpayer.
4. Destruction of a business or personal records by water damage or fire.
5. Lack of monetary funds.
6. Civil unrest.
7. Any other reason establishing the inability of the taxpayer to meet the IRS deadlines.
Once a taxpayer receives the tax notice regarding possible penalties, he must request a deduction and put it in writing. This is very important and should never be postponed. This person must justify his request for reduction and indicate the reasonable cause. Make a copy of the penalty letter you received and any documents you think are necessary to help your case.
From this point on, the IRS will either reject your motion or approve it. If they reject it, they will send you a letter explaining why they did it. From there, you need to do one of the following:
· Ask the IRS to appeal. All you have to do is send a letter to the IRS and call it "Penalty Appeal".
· Visit or call your local branch and speak with a collection specialist. They will tell you what you can do to help your cause.
· File a Form 656 which is a Offer of compromise. It is a trading settlement.
You can simply pay the penalties and then request reimbursement via a form 843.
If you are unsure of what to do or why you receive a penalty in the first place, contact your local IRS tax assistance agency today. Many tax accountants specialize in fighting tax penalties and can save you hundreds of dollars and make sure that everything that can be done will be done.