When it comes to tax debts, penalties are very serious. The reason they incur so often and so high is to try and force compliance. As long as you open the lines of communication and negotiate with them, their grip on you will lessen. Even if an unforeseen event occurs where you have difficulty paying, they will most likely be more understanding than if you were to ignore them completely. The IRS has the ability to be lenient or even eliminate penalties altogether if they choose, which is why it is a good idea to be open and honest with them from the start.
The IRS has the ability to grant what is called a Reasonable Cause Relief which dissolves any penalties. However, you must meet their standards, such as an event occurring where you cannot pay off your tax debt in the time agreed upon. There are many scenarios that could make you qualify, as long as the IRS sees that you tried to make the payment. The events listed are:
- Death, serious illness, or any other unavoidable absence
- Failure to access the necessary records
- Natural disaster, Fire, casualty or other disturbance
- Wrong advice from a competent tax professional
- Wrong advice, either written or oral, from the IRS
- An act of God
We can help open the lines of communication between you and the IRS, which can be difficult at the start. Then, if you have issues making payments, let us assess your situation so we can tell you whether or not you qualify for a Reasonable Cause Relief.