There are numerous circumstances where the IRS could issue civil penalties against a taxpayer. From the failure to pay taxes to noncompliance with FBAR rules, each of these penalties could end up costing a lot of money.
Fortunately, for many taxpayers facing these penalties, there are steps to take that could reduce or eliminate the penalties entirely. A dedicated tax lawyer could help you determine if you are eligible for this relief and formulate a plan to get it. Let a Vienna IRS penalty abatement lawyer review your case and advise you on your options.
Although there are hundreds of potential penalties that the IRS could implement on a taxpayer, only a handful of these options are used with regularity. Most IRS penalties are based on a taxpayer’s failure to pay taxes, the absence of a tax return filing, or errors with tax estimates. A penalty abatement lawyer in Vienna could provide further analysis of an individual’s or business’s tax profile to determine where they might be at risk of penalties.
More than half of all IRS penalties are related to the failure to pay taxes. These penalties can occur whether a taxpayer simply submits their payment late or does not pay their tax bill at all. The penalty for failing to pay is 0.5% of the balance due each month. This penalty maxes out at 25% of the total balance.
The second most common tax penalty involves errors regarding the estimated tax payment. When a taxpayer lacks sufficient withholdings, the government could assess penalties based on the interest that was lost during the tax year.
Another common penalty stems from a taxpayer’s failure to file their tax return on time. The penalty for failure to file is 5% of the balance due each month, up to a maximum of 25%.
The options available to a taxpayer will largely depend on the type of penalty that they face. The IRS allows for penalty abatement in some cases. While abatement is never guaranteed, numerous penalties can be reduced or eliminated each year with the help of an IRS penalty abatement attorney in Vienna.
In many cases, the best way to address an IRS penalty is by seeking abatement. The first-time penalty abatement program offers taxpayers an opportunity to have some penalties reduced or removed completely. To qualify, they must have:
Many taxpayers do not require legal assistance to apply for first-time abatement. If there is a persistent issue, or if the taxpayer has other tax controversies to address, a lawyer could then offer advice when it comes to reducing or eliminating penalties.
Abatement is generally available in cases where a penalty was automatically assessed after a late filing or payment, but there are instances where a lawyer could utilize other methods outside of abatement. This is most common in cases that stem from IRS investigations or audits. In these situations, appeals are generally required. It is important to remember that audits are rare and many penalties can usually be resolved through abatement based upon reasonable cause. If a penalty is abated, any interest that has accrued on that penalty is also eliminated.
When the IRS assesses a penalty against you, there are legal options that could help you reduce or eliminate that financial burden. In many cases, penalty abatement could help you resolve your IRS dispute. If you are routinely having to deal with penalties or have other tax disputes that might involve penalties, you could benefit from the guidance of legal counsel. Contact a Vienna IRS penalty abatement lawyer today.
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, Vienna, 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.