Did you know that the average taxpayer spends eleven hours doing taxes, according to the IRS? The number of time changes on which forms you use, and business filers can spend up to twenty hours.
With all of the time that taxes require, it’s easy to end up submitting taxes late or filing your taxes in such a way that it results in IRS penalties. If this has happened to you, you may qualify for a penalty abatement.
If you’ve never heard of that, you’re in luck. We’ll tell you exactly what a penalty abatement is and how to qualify for one. All you need to do is read on.
What is a Penalty Abatement?
A penalty abatement is otherwise known as relief from a penalty. The IRS reviews billions in tax penalties on a yearly basis. In some cases, they may be willing to provide you with a penalty abatement.
There are two main forms of penalty abatement – those given by administrative waiver, and those known as a first-time abate.
First time abates must be qualified for under specific circumstances. Administrative waivers, on the other hand, do not need to be. When a waiver is released, people are automatically eligible for relief and don’t need to do anything.
One example of when a waiver is given is when new tax laws are passed late in the year. Guidance on how to comply with it is delayed, and so an administrative waiver is given to make sure people don’t face consequences for something they can’t control.
How to Qualify
When looking for a penalty abatement, the first thing you should do is seek tax relief services. They will help to see if you can qualify for relief.
Qualifying is actually fairly simple. There are only three penalty abatement criteria. You must be current on filing tax returns, current on your tax bills, and compliant in current or previous years.
There are three main penalties eligible for first-time abate. These penalties are failure to file, failure to pay, or failure to deposit. You may receive a penalty abatement for one or more of these on a tax return during a single tax period.
Even if you don’t think you qualify for relief from a penalty, check with tax relief services. They may notice something you didn’t that will qualify you, or otherwise help you out.
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Now that you know everything you need to know about penalty abatement, you’re prepared for when tax season rolls around. In the meantime, why don’t you check out the rest of our website?
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