Reducing Penalties and Interest on Tax Debts

Can I abate interest on my back tax bill?

If a penalty or tax is removed, the accured interest related to that penalty or tax is removed. However, as a rule, interest cannot be abated.

Can I call the IRS and request penalties be abated?

Yes. Most people will qualify for a one-time penalty abatement. This will not remove all penalties, but some some. You must be in a collection alternative or be up-to-date to qualify. Those who have paid off the IRS with installment agreements may want to investigate a possibilty of a penalty abatement

How much can I save with a penalty abatement?

Never more than your total penalties and the interest related to it. Be wary of tax resolution schammers claiming they can save you 50% of your tax bill with a penalty abatement, when 50% of your tax bill isn't penalties.

I have a really good reason for being late or not paying. Can I get any more releif than just first time penalty abatement?

Yes. You could seek a reasonable cause abatement. Penalties can be abated for several year if you have "good cause." We offer no promises when we submit an abatement as the IRS tends to be arbitrary in its decision making process on what constitute "good cause."

What about the Trust Fund Recovery Penalty in payroll tax cases. Can that be abated?

The answer is it can be removed, but it is technically not a penalty abatement. Despite the wording, the Trust Fund Recovery Penalty is not actually a penalty.

What about FBAR penalties and foreign reporting penalties?

FBAR penalties have a completely different process as the FBAR Form stems from Title 31 of the US Code.

Penalties for failure to file foreign reporitng forms, such as Form 5471 and Form 8938 stem from Title 26 of the US Code, the Internal Revenue Code, so those processes are more consitent with typical penalty abatement procedures. However, it is highly specialized.