Penalty Abatement is an opportunity the IRS grants to those who “made an effort to comply with the requirements of the law, but were unable to meet your tax obligations, due to circumstances beyond their control”, as they state in their website.
When writing a Penalty Abatement Letter, you are asking the agency to eliminate your penalty by exposing the facts that you won’t be able to pay all the debt. Here are some aspects to take into consideration:
Determine the type of penalty you want to be removed before starting your letter
Even though there are around 150 different penalties, the three most common IRS penalties are:
- Failure to file penalty
- Failure to pay penalty
- Estimated tax penalty
Collect all the documents that will prove your case and attach them
This will add credibility to your letter and let the IRS understand things easier, some of the recommended documents are:
- A copy of the tax bill you want removed.
- Photos related to the problem, like screenshots, pictures of yourself showing how you couldn’t make it to pay (being ill for example), pictures of disasters, etc.
- Any other proof that will help you make your case more solid, like hospital records, news, bills.
Explain all the elements that stopped you from paying the debt
Especially those that were outside your control, all your complications need to be written in a way the IRS can understand your point.
You need to the include what happened, when it happened and how it made you fails from attending the debt. Always remember to state that even those events happened to you, you still made the effort to meet your obligations.
Also, don’t hide prior penalties and request the abatement before the statute expires.
This process can take some time, particularly when you are working on your own. Contact America Tax Relief’s experts to help you build the Penalty Abatement Letter that will be approved and save some time!