A failure to pay taxes through the Internal Revenue Service (IRS) is a tax controversy that you must rectify. The IRS has a collection of tools at their disposal to acquire delinquent funds: they may garnish a person’s wages, place a lien on physical property, or even carry out a levy to directly seize assets.

Thankfully, a single failure to pay or file a tax return does not automatically mean that the IRS will impose penalties. While it is certainly within their power to do so, the law also provides for a first-time penalty abatement. If you have a large tax bill that is currently subject to another kind of tax examination and you wish to abate an undeserved penalty, you could accomplish that with a trustworthy tax lawyer. A Washington DC IRS penalty abatement lawyer might be able to help individuals, couples, and businesses explore their options regarding burdensome penalties.


Potential IRS Penalties

The IRS has broad powers to investigate alleged failures to pay taxes. If they believe that a failure to pay has occurred, they may issue penalties that add to the owed amount, place liens on property, or place a levy on assets to make up for a delinquency. No matter the exact circumstances that have led to this situation, a Washington DC penalty reduction lawyer could help to work towards a solution.

If someone fails to file a tax return, they will be penalized 5% of the amount owed for every month that it remains delinquent, maxing out at 25%. If they fail to pay the full tax amount owed, they are penalized at 0.5% of the delinquent amount per month, again maxing out at 25%. If there is an Accuracy Related Penalty, they must pay an additional 20% of the underpayment that was due to negligence or disregard of the rules. Non-willful failure to file an FBAR could lead to a $10,000 yearly penalty, with the potential to go up to 50% of the highest aggregate account balance per year. If this is not addressed, it is possible to see the penalties rise to an excess of $100,000, which is why it is important to find a lawyer early in the penalty abatement process.

The First-Time Penalty Abatement Program

While the IRS can be strict in demanding the payment of taxes, they also realize that there is room for flexibility. A clear example of this dynamic is the presence of the First-Time Penalty Abatement Policy. This policy states that the IRS may waive penalties resulting from many tax controversies if a taxpayer can demonstrate that:

  • They have filed tax returns for the previous three years, or were not required under the law to do so
  • They have currently filed all relevant tax returns or requested an extension
  • They have paid all due taxes or made arrangements to do so

The process involves filing Form 843, which a taxpayer can do on their own without the aid of a lawyer. This form allows them to identify the overdue tax that has resulted in a penalty and provide an explanation for non-payment. Along with this form, they should provide proof that they qualify for the program under the criteria listed above.

If this is a recurrent issue or if it is in conjunction with another tax controversy, a local IRS penalty abatement attorney could help demonstrate reasonable cause and produce proof that there was no willful neglect. If a penalty is abated, any interest that accrued on that specific penalty can also be abated as well. The IRS generally charges 3 or 4% on the tax balance.

Reach Out to a Washington DC IRS Penalty Abatement Attorney Today

If you are facing potential penalties for the non-payment of due taxes, you may be wondering what your options are to avoid IRS penalties.

Thankfully, a single allegation of non-payment will not necessarily result in any permanent penalty and most taxpayers can correct this mistake on their own. If you have a larger tax burden ($50,000 or more), a Washington DC IRS penalty abatement lawyer could show how your past record of payment, current payment of due tax, and accommodations for future payment make you eligible for a reduction or removal of penalties. Contact a lawyer today to discuss your options.

Attorney John Pontius

Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC,  Rockville, MD, Bethesda, MD, Fairfax, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.

Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.

Client Reviews
John helped us with a DC tax audit and succeeded in getting us a "no change" final decision. The issues were related to two flow-through entities and the use of carry-forward operating losses -- something that the DC auditors struggled to understand and with which they did not have any...
Paul A
Mr. Pontius is extremely professional and was able to take care of my tax returns which includes international bank accounts quickly and at a very reasonable price. Would definitely recommend.
I received a fee this past November from the IRS for over $800 because of an error I made on my 2016 taxes. I called my cousin, John Pontius, and he immediately knew what steps needed to be taken. Thanks to him, the fee was cleared. A 10 minute conversation...
As an American citizen living in the Middle East my local banker informed me that I needed to file FBARs and report my worldwide income to the IRS. Through the recommendation of another attorney at an international law firm, I was introduced to John Pontius. Mr. Pontius efficiently and effectively...
Kareem S
John handled a difficult IRS lien for my client. He was excellent in getting the lien released so we could close on the property. I would highly recommend John .
Bobbie M
We were seeking tax advice with managing two properties, LLC, as well as some future financial planning. John responded to my call in a timely manner and was happy to answer our questions while referring us to specialists who can manage our accounts on a more regular basis.
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