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The Internal Revenue Service (IRS) has the power to issue civil penalties against taxpayers under a variety of circumstances, including for unpaid income taxes or some reporting noncompliance. Regardless of the specifics, these penalties can add up quickly.
The good news is that there are options for reducing or eliminating these penalties entirely. Learn if you can avoid paying these penalties when you speak with a Fairfax IRS penalty abatement lawyer. Although abatement generally does not happen on its own, our local tax lawyer could discuss your options while addressing another tax controversy like offshore disclosure or tax evasion.
One of the primary roles of the IRS is to deal with taxpayers who fail to file their tax returns or pay what it is owed. Thousands of notices are sent out annually with proposed penalties based on this lack of compliance. Some individuals can simply pay what is owed, including any penalties, to resolve the matter. This does not require the help of an attorney, but other cases are not so simple and may involve an installment agreement, offer in compromise, or a Currently Not Collectable request.
There are times when raising a “reasonable cause defense” for failing to pay is an option. These circumstances are limited, like when a taxpayer suffers a severe personal injury or a catastrophic property loss.
Reasonable cause defenses are available under other circumstances, too. Even if you filed your claim on time and paid your taxes, the IRS could send you notice regarding an accuracy-related penalty. These are used when federal authorities believe a taxpayer underreported their income, overstated their deductions, or acted negligently in some way.
Reasonable cause defenses can be based on different factors. You might have relied on the help of an inexperienced tax preparer or received incorrect earnings information from an employer. If a penalty abatement attorney in Fairfax can establish to the IRS that the error was reasonable and unintentional, they may be able to have the taxpayer relieved of any penalties.
The IRS has the power to place liens on your property or impose a levy on your assets if you do not pay your tax bill, which will hinder your ability to sell your home or make other critical decisions.
The failure to file a tax return will result in a penalty of 5% of the amount owed. This accrues every month, up to a maximum of 25%. Accuracy-related penalties can lead to an additional penalty of 20% of the owed amount. Someone who did not file an FBAR could incur a $10,000 penalty each year it is not addressed.
Inaction could result in tens of thousands of dollars in penalties over time, which would require a penalty abatement lawyer to help resolve. Furthermore, there may be interest accrued on penalties that remain unpaid. Abating the penalty would abate the interest as well, but interest cannot be abated independently.
The first-time penalty abatement policy offers taxpayers the opportunity to seek forgiveness for their tax penalties due to failing to file a return or pay their taxes on time. Eligibility is limited to individuals who have made their payments on time over the previous three years. They must have also filed a current tax return or extension. Finally, this option is only available when a person has either made all their payments currently due or entered a payment plan with the IRS. Most taxpayers can generally take advantage of this policy without the help of legal counsel, but there are certain sensitive situations where a Fairfax taxpayer should contact a lawyer about using the reasonable cause defense to abate their accrued penalties.
If you have been notified of possible penalties by the IRS, you have time to work with legal counsel and make things right. There are options that could help you work out a payment plan or even see the penalties abated entirely. Call a Fairfax IRS penalty abatement lawyer today to learn more.
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.
