Abatements

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In a recent Fiscal Year the Internal Revenue Service assessed almost $23 Billion in penalties against taxpayers. They also abated over $14.5 Billion of these penalties due to Reasonable Cause and Other Errors. That's an abatement rate of 37%. (source: Internal Revenue Service Data Book)

An abatement is when the Internal Revenue Service will forgive some or all of the penalties, which will automatically include abatement of some interest. The reason some interest is abated along with penalty is because the Internal Revenue Service charges interest on the penalties also. Interest in itself is not abatable under the law, unless it was erroneously assessed.

To qualify for an abatement you must have a reason or excuse for not filing and/or not paying that made it impossible or impractical for you to do so timely.

Some reasons and excuses are:

Incapacitating health problems of the responsible person

Theft , loss, stolen or destroyed records

Catastrophic events: fire, flood, death of taxpayer, war

Bad advice from a qualified tax professional (on a substantive issue)

Bad advice (in writing) from the Internal Revenue Service

. . . and any other reason that incapacitates the taxpayer or responsible person.

If you feel you have a good excuse, request an abatement! It doesn’t hurt to try and you never know if you’ll get it unless you try. To request an abatement you simply need to complete Form 843 or write a letter to the Internal Revenue Service and explain your circumstances and provide evidence.

You have the right to representation by an Enrolled Agent (EA), CPA or Attorney.
You don't have to face the Internal Revenue Service alone, or at all!

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