Introduction

Dealing with the Internal Revenue Service (IRS) can be intimidating. If you receive a notice from the IRS about penalties, interest, or back taxes owed, you may benefit from working with a penalty abatement lawyer. A knowledgeable tax attorney can help you understand the notice, evaluate your options, and guide you through the process of responding to the IRS.

Who Needs a Penalty Abatement Lawyer?

Here are some common situations where hiring a penalty abatement lawyer could help:

• You received a notice from the IRS about failure to file, failure to pay, or failure to deposit penalties.
• You have unfiled prior year tax returns that are resulting in penalties.
• You have a reasonable cause for the penalties, such as financial hardship or reliance on a tax professional.
• You are facing multiple years of unfiled tax returns.
• You owe a large amount of back taxes and penalties and need help negotiating with the IRS.

If any of these situations apply to you, meeting with a qualified tax relief attorney can be extremely beneficial.

Services a Penalty Abatement Lawyer Provides

An experienced penalty abatement lawyer can provide a variety of services to help clients navigate IRS issues. Some of the most common services include:

Tax Penalty Abatement Requests

• Evaluate penalty notices to determine validity of penalties assessed
• Prepare a reasonable cause statement detailing why penalties should be waived
• Submit formal written requests for first time abatement, reasonable cause abatement or other penalty relief strategies

Unfiled Tax Return Preparation

• Interview clients to gather information needed to prepare unfiled returns for prior years
• Analyze records and documentation to maximize deductions and credits
• Prepare and file accurate past due tax returns with the IRS

Audit Representation

• Represent clients in IRS audits related to penalty disputes or unfiled tax returns
• Gather evidence and documentation to support client’s filing positions
• Negotiate with IRS agents and appeal any unfavorable audit decisions

Settlement Negotiations

• Based on case facts, research IRS options for settling tax debts
• Develop and execute negotiating strategies to minimize penalties and interest
• Guide clients through Offer in Compromise, Currently Not Collectible status, or payment plans

When Should You Contact a Penalty Abatement Lawyer?

If you receive an IRS notice about penalties and are struggling to understand what it means or how to respond, contacting a tax relief lawyer right away is wise.

Some reasons to connect with a penalty abatement lawyer immediately include:

• Your first IRS notice gives you only 30 days to respond before additional failure to pay penalties start accruing.
• The deadline to submit penalty abatement requests is generally only 60 days after receiving your first notice.
• If you miss filing deadlines, you lose appeal rights and some penalty relief options.
• The longer unpaid penalties sit, the more interest accrues – resulting in an even larger tax bill.

Meeting with an attorney as soon as possible gives you the best chance to take control of the situation before it snowballs. Don’t delay seeking professional tax help.

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Questions a Penalty Abatement Lawyer Will Ask You

During an initial consultation, an experienced penalty abatement lawyer will ask several questions to understand the facts of your case, including:

• What type of penalties were assessed (failure to file, failure to pay, etc.)?
• For what tax years are penalties owed?
• When did you receive the first penalty notice from the IRS?
• Have you previously tried calling the IRS yourself about the penalties?
• Has the amount of penalties and interest increased recently?
• Do you have a reasonable explanation for why you could not comply with filing or payment requirements?
• Have you experienced events out of your control like medical issues or financial hardship?
• Do you have access to supporting documentation to substantiate reasonable cause claims?

Thoroughly answering these questions will help the attorney better evaluate the IRS notices, provide advice tailored to your situation, and begin formulating strategies to assist with the case.

First Steps a Penalty Abatement Lawyer Will Take

Once an analysis of your situation is complete, some of the first steps a penalty abatement lawyer commonly takes include:

Review IRS Correspondence

Reviewing any letters, notices, or other correspondence sent by the IRS ensures the attorney fully understands issues from the IRS perspective.

Request IRS Transcripts

IRS transcripts provide detailed records of your tax account, including penalties assessed and interest accrued. Transcripts enable developing comprehensive case strategies.

Prepare Power of Attorney

A Power of Attorney grants the penalty abatement lawyer authorization to communicate with the IRS, access personal tax records, and handle the case.

Submit Extension Requests

If more time is needed to prepare reasonable cause statements or unfiled tax returns, the attorney can submit requests for 30-day or longer extensions.

Begin Penalty Abatement Process

By gathering evidence and documentation, the tax relief lawyer starts building reasonable cause arguments and finalizing requests for penalty relief.

Results a Penalty Abatement Lawyer Might Achieve

Outcomes that hiring an experienced penalty abatement lawyer could help you obtain include:

• Getting certain penalties waived, such as first-time penalty abatement or reasonable cause relief
• Having penalties reduced through negotiations and settlement agreements
• Preventing further penalties from accruing by taking control of your case
• Avoiding future problems by setting up tax compliance procedures you can consistently follow
• Removing liens that were placed on assets like property or vehicles
• Eliminating levies that were set up to garnish wages or seize money from bank accounts
• Creating affordable payment plans structured around your budget and ability to pay back taxes

With the right legal help on your side, many options exist for resolving IRS penalty disputes as favorably as possible. The complexity of tax rules and procedures makes consulting an expert essential.

Conclusion

If you have received notices from the IRS about various tax penalties, I strongly encourage you to meet with a penalty abatement lawyer. An experienced tax relief attorney has the knowledge needed to comprehensively evaluate your situation and guide you through available options based on an analysis of the specifics of your case. By taking proactive steps now, you can get on track towards resolving IRS penalties and preventing further negative consequences. Don’t wait to get professional assistance – a penalty abatement lawyer can make navigating IRS issues much less intimidating.

References:

• Tax Penalties Handbook | Internal Revenue Service (irs.gov)
• What You Should Know About Penalties | Internal Revenue Service (irs.gov)
• Reasonable Cause Assistance | Internal Revenue Service (irs.gov)
• Changes coming to the first time penalty abatement (FTA) | SBLaw (stevenblaw.com)