Everyone finds tax season challenging, but those who owe taxes are more so. You could pay fines or interest when you file and pay your taxes. The IRS indicates with these fines that you have either made an error on your taxes or have not paid the total amount. For those who qualify, the IRS thankfully provides a
first-time relief. Your tax bill may be reduced, or the IRS may waive your
penalties if you satisfy specific conditions or circumstances.

IRS penalty abatement is not automatically given to taxpayers by the IRS. IRS waives Relatively few tax fines; current data indicate that only around 11% of tax penalties are. Furthermore, the IRS awards abatements based on equity; the taxpayer's capacity to pay the tax, penalty, or interest owed is
not considered.

Eligibility for the IRS Penalty Abatement

For a single tax period, this penalty abatement eliminates specific penalties. But you need a track record of tax compliance to be qualified. The IRS penalty abatement considers you compliant if you have submitted taxes for three years without punishment.

Types of IRS penalty abatement

• Penalty for Not Filing

Failure to file taxes on time leads to a penalty. It could be on a partnership, S company, or individual tax return. People usually pay penalties with their taxes. The fine with interest can't exceed 25% of your overdue taxes. The IRS penalty abatement calculates partnership or S business tax
penalties based on the number of partners or shareholders on file during the
tax year.

• Penalty for Nonpayment

The government charges a failure-to-pay penalty if you don't report and pay the proper tax. Some past-due taxes can be penalised, but not more than 25%. The failure-to-file penalty will be lessened if the IRS assesses both penalties for the same month. The reduction is the same as the penalty for
failing to pay that month.

• Failure-To-Deposit Penalty

The IRS also offers a first-time penalty reduction for the failure-to-deposit penalty. Employers who have employment tax deposits must submit them either monthly or semi-weekly. An employer who doesn't timely deposit taxes will face fines from the IRS for:

• Withholding of federal income taxes

• In Social Security

• Medical Unemployment Tax

The agency levies this fine if an employer deposits money incorrectly or fails to deposit the right amount. The percentage of taxes improperly submitted determines the penalty amount.

How To Request an IRS Penalty Abatement

The IRS allows you to apply for a first-time penalty abatement by mail or phone. Use the toll-free number on your letter or notification to phone the IRS. Nothing further will be required of you. An IRS agent who will review your account will assess you for relief.

Sending a written statement or a completed Form 843, Claim for Refund and Request for IRS penalty abatement is one way to submit the request. Mail it to the address on your letter or notification.

Conclusion

IRS penalty abatement can be consoling when you owe money on taxes. Penalties for many taxpayers are the outcome of unintentional violations brought on by inadequate funds or lousy advice. Use penalty abatement on your most excellent penalty if
your liability is spread over several years.