Can I Qualify for a Penalty Abatement?

On: November 12, 2023

If you have an outstanding tax liability owed to the IRS, it is likely that you will also face some interest and penalties attached to it. The IRS has different types of penalties that they can attach to your tax liability and the longer your owed taxes sit, the more penalties and interest that will accrue.

Once a tax liability gets large enough, you may start to worry about how you can even afford it. The IRS requires that all owed taxes be paid on time by the due date in full. However, not everyone can do this. There are options available such as the first-time abatement penalty waiver. Knowing whether or not you qualify for this waiver can help you set yourself up for success in paying down your tax liability.

At Leading Tax Group, we assist our clients in filing first-time penalty abatements. Should you not qualify for this program, there may be another available to you. With our experienced IRS tax experts and tax solutions, we will work with you to get your tax liability lowered.

What Is a Penalty Abatement?

A penalty abatement is when you receive a waiver from the IRS for a penalty that you have incurred from them due to having unpaid and outstanding taxes. Not filing your taxes on time, not paying taxes on time, and other factors can lead to the generation of several penalties.

Over time, these penalties add up and can take your manageable tax liability and turn it into a financial hardship. If you do receive a penalty abatement, the penalty will be waived, which means you will not owe it.

What Are the Common Penalties the IRS Imposes That I Can Use an Abatement On?

There are different types of penalties that the IRS can impose against you depending on your specific situation. Some of the most common penalties include:

• Failure to pay
• Failure to file
• Failure to deposit

Most of the penalties that you face from the IRS are assessed automatically on your account and will continue until you have paid your outstanding tax debt in full.

Does Everyone Qualify for a Penalty Abatement?

No. Not everyone will qualify for a penalty abatement and your tax professional can assist you in better understanding if you do qualify.

In general, to qualify for a penalty abatement, you must be in compliance with all of your tax returns and payments to the IRS. This means that you cannot have a previously outstanding tax debt (unless it is part of an already agreed upon arrangement with the IRS) or an unfiled tax return from a previous year.

Will the IRS Automatically Grant Me a Penalty Abatement?

No. the IRS does not automatically grant penalty abatements and the IRS is not required to approve a penalty abatement either. If you want to apply for a penalty abatement, it is best to work closely with your tax professional to verify that you qualify and to ensure that all information is properly filed.

Leading Tax Group Can Help You Get Your IRS Penalties Abated 

A penalty abatement can provide you with some relief when you have back taxes that you owe. Through a penalty abatement, you can have penalties waived on your account thus making your financial responsibility less and more manageable.

The tax professionals at Leading Tax Group can assist you in making sure you qualify for the first-time penalty abatement waiver and walk you through the application process. In addition to penalty abatements, our team can assist you in working out payment arrangements with the IRS so that you do not face collection activity.

If you would like to discuss your current tax situation, please call Leading Tax Group now for a free consultation.