Follow the instructions in the IRS notification you received. Some requests for fine relief may be accepted over the phone. Reducing the penalty for the first time · Reasonable cause · Eligibility to appeal a fine Follow the instructions in the IRS notice you received. This means that eligible taxpayers don't need to apply.
If they have already been evaluated, the sanctions will be eliminated. If you've already paid, the taxpayer will receive a credit or refund. Check if your circumstances could entitle you to a reduction. The IRS may consider waiving fines if your reasons for not paying on time are due to circumstances beyond your control, such as a death in the family, illness, incarceration, a hurricane, or the destruction of your records.
However, if the only reason you don't pay is because you don't have enough funds, the IRS won't exempt you from fines because it makes you responsible for setting aside money for taxes. However, they may consider waiving sanctions if you have been unemployed. If the customer has a clear and reasonable reason for the sanction, first present the reasonable cause argument and ask the IRS to reduce the penalty for those reasons. However, for these ineligible fines, taxpayers can use existing penalty relief procedures, such as requesting relief based on reasonable cause criteria or the reduction program for the first time.
Estimated tax penalties cannot be reduced with the FTA exemption. We approved the relief for the first time for the amount of the additional penalty accrued up to the date the tax was paid in full. The IRS automated Reasonable Cause Assistant (see below) asks the representative to request documentation. The IRS will continue to try to collect the taxes you owe, but may be willing to exempt or reduce penalties if you show that you have a good reason.
Many IRS representatives look for the presence of a penalty using the penalty transaction codes on the taxpayer's account to determine if they qualify and therefore avoid subjectively determining whether the amount of the penalty is significant. If the customer technically doesn't qualify for an FTA due to a fine in the past three years, but complies with the rules, submit this history along with other arguments to the IRS to reduce the penalty. In addition, in the TIGTA study sample, IRS employees did not correct any of the inaccurate determinations, even though the determinations were in conflict with the IRM's sanction reduction procedures. This is good practice because the customer may need to use the FTA exemption for a subsequent year, and the reduction for reasonable cause will not disqualify the customer from receiving an FTA.
The IRS requires its employees to use this program to make decisions on requests for reduction of fines, including requests for an FTA. In 2001, the IRS established the FTA to help manage the reduction of sanctions in a consistent and fair manner, reward past compliance, and promote future compliance. The IRSAC states that Form 843's instructions for reducing penalties are “confusing at best.”.