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Owing taxes to the IRS is no fun, it simply means additional penalties, warning notices, and possibility of imprisonment. While you might get into an IRS debt forgiveness plan, the penalties and interests continue to accrue until full payment. To provide some relief to the taxpayers, the IRS has a provision that allows first-time offenders to request an abatement of penalties. If eligible, it can help lower your overall IRS debt. Tax abatement is an IRS debt relief option that allows eligible taxpayers to request a waiver on additional penalties. Many are unaware of this provision, its eligibility, and related aspects, which is why we are going to discuss the essentials of tax abatement in the blog.

1. How can I qualify for an IRS Abatement of Penalties?

Compliance with tax returns is the prerequisite to being eligible for tax abatement. If unpaid, you should have filed an extension for all required dues and have zero pending requests issued by the IRS against you.  According to the IRS, you can request tax abatement if:

  • You have no additional penalties imposed on you in the past three years
  • Your current tax returns are filed timely
  • You have paid or arranged for all your unpaid dues through IRS tax installment agreement or any other IRS debt relief option

Understanding the qualifying criteria for IRS penalty abatement can be complex, which is why it is suggested that you should seek IRS debt help from a debt attorney near you. 

2. How to request an IRS Penalty Abatement?

When it comes to seeking an IRS debt relief option like IRS penalty abatement, you can take either of the two possible ways according to your tax situation:

  • If the IRS has sent you a notice for a penalty, you can write them a penalty abatement letter requesting to waive it off by yourself or you can reach out to a debt attorney to help you steer through this storm.
  • If you have paid the penalty imposed by the IRS, you can fill out Form 843 ‘Claim for Refund and Request for Abatement’ and request a  refund.

3. What are some common IRS penalties?

With over 150 various penalties for return errors, late payments, and late filing, the IRS takes a ‘no-nonsense approach’ for tax delinquents. When it comes to penalizing tax offenders, some of the common reasons for which the IRS can impose a penalty are:

  • Failure to file penalty by due date: 5% of the monthly unfiled dues up to 25%.              
  • Failure to pay penalty by due date: 0.5% per month of the tax balance due up to a maximum of 25%.
  • Underpayment of estimated tax penalty: Equivalent to the interest lost due to insufficient withholdings or paying taxes throughout the fiscal year.


We hope this blog was helpful in learning about IRS penalty abatement. Relief from the IRS not only comes from penalty abatement, but also from initiatives like the ‘Fresh Start Initiative’ that presents debt forgiveness options like ‘offer in compromise’, and ‘IRS installment agreement’. A local tax attorney can help you in selecting the best plan for your tax situation. Dallas residents looking for a tax attorney in Dallas Tx expert in IRS penalty abatement services, consult a leading Dallas tax attorney that offers a range of IRS debt help services. A local Dallas tax lawyer will make tax consultations easier.



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