- June 26th, 2013
- John Dillard
- IRS Representation, Back Taxes, Offer in Compromise, IRS Tax Problems, Tax Advocacy
Dealing With the IRS…Working With the IRS Might Save You Thousands
There are a myriad of penalties which the IRS can use to encourage compliance ranging from information return penalties, non-filing, non-payment, estimated payment, and failure to deposit penalties. If you are assessed penalties for any reason you still have options. Both the IRS and states will work with you to address your outstanding taxes, interest, and penalties. One of the first defenses to explore is whether you have reasonable cause for your original failure to address you past returns and outstanding monies. If you are to be granted relief under these provisions you will need to be able to show that you have exercised ordinary business due diligence and care in calculating your tax obligations. You will need to be able to illustrate that obligations were generated when circumstances existed which were beyond your control contributed to the monies being owned and assessed.
Not being aware of a law is not a valid defense which can be successfully used when attempting to request penalty abatement as you are required to be prudent in addressing your obligations and responsibilities. Our tax system is one of voluntary compliance and tax penalties are the vehicle by which the IRS uses to ensure that you are financially motivated to file and pay your taxes as they become due. The IR S’s goal is to provide a consistent and fair methodology to assessing penalties to provide civil tax penalties to ensure ones tax obligations are satisfactorily addressed.
When evaluating penalty abatement issues the IRS will consider whether or not a penalty will cause a significant hardship such as a levy might impair a taxpayer’s ability to acquire needed medical care. As well a death, serious illness, or unavoidable absence may establish reasonable cause for considering penalty abatement. However items such as forgetfulness, ignorance of the law, and making a mistake are not generally allowed as reasonable cause in evaluating penalty abatement issues.
Please be reminded that the IRS will work with you to set up an installment agreement to pay outstanding monies as well as perhaps an Offer in Compromise if you qualify.
John Dillard is an author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (a Christian CPA firm) and for his latest book Overcoming Life’s 9/11′s: Job’s Journey.
“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!”
Preparing the S Corporation Income Tax Return K-1 A Guide How to Guide to Prepare a K-1
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