Everyone dreads dealing with the IRS anytime. No one wants to find out that they are being penalized for any given reason. What many people don’t understand is that when you owe money to the IRS, you can actually find that they will show you mercy in certain circumstances. If you find yourself getting a bill from the IRS, don’t be so quick to turn around and pay that bill. You may be able to find a way around it. Mark Dicus & Company is here to share some tips to help you get forgiveness from the IRS when you own them money.
What are Typical IRS Penalties?
When it comes to payment, the IRS likes to receive their payments on time. When you aren’t on time, you are going to be facing penalties. Following are some of the different kinds of IRS penalties.
– Late Filing: For C corporations and individuals, the penalty is usually 5% of the total money that is owed per month until you reach the 25% maximum penalty. For S corporations and partnerships, the penalty is $200 per month, per partner until the $2400 maximum penalty is reached.
– Late Payment Penalties: When you pay late, you will be penalized by .5% of the money owed and that increases every month until 25% is reached.
How Can I Get IRS Penalty Waived?
If you have received a bill from the IRS, it is important to take a deep breath and remember that there are some ways to get around them. Here are some of the ways you can beat an IRS penalty.
– First Time Abatement: If this is the first time you have been penalized for paying late or filing late, you can apply for first time abatement. They will usually lift the penalty, but this can only be done one time.
– Reasonable Cause: If you have a legitimate reason for filing late or paying late, they will usually show you mercy as well. You should provide documentation if you have it, that will explain what your circumstances are to lead you to late filing or payment. Legitimate reasons could include death or serious injury, fire or natural disaster, or missing records.
Appeal IRS Abatement of Penalties
When you get denied from the IRS after you have appealed the penalty, you shouldn’t give up. It is important to remember that you should always speak confidently and honestly when you’re talking to the IRS. If they deny your first time abatement, you can always appeal it, and they will give you the steps to do so. In some instances, you can get your money back when you have paid penalties as well.