IRS Penalty Abatement Solutions for Seattle, WA Taxpayers
The United States tax system is based on voluntary compliance. In other words, unlike some countries that withhold all of the taxes due from taxpayers, eliminating the need for reporting, the U.S. depends to a large extent on voluntary reporting and compliance. The penalties for failure to comply with the rules, even unintentional failure to comply, are severe. IRS penalty abatement specialists overcome these issues every day.
There are more than 140 distinct IRS tax penalties that may be levied against a taxpayer. These penalties are intended to prevent against non-compliance and to punish those who fail to comply with the Code. IRS tax penalties fall into 5 principle buckets:
- Accuracy penalties
- Fraud penalties
- Underpayment penalties
- Late filing or failure to file penalties
- Combined penalties.
Interestingly, one of the harshest penalties is for failure to file rather than failure to pay taxes. No matter whether you can afford to pay your taxes on time or not, you should always file when due to avoid late filing or failure to file penalties which are among the harshest of the penalties. The “failure to file” penalty begins at 5% of the amount of tax owed the day after a tax return is due, and can reach as much as 25% of the total tax due after 5 months. Of course, the penalties for fraud are quite severe as well, reaching up to 15% per month, with a maximum tax penalty of 75% of the amount of tax owed. Moreover, there are potential criminal ramifications in the event of fraud as well.
Insofar as the penalties are cumulative, it is possible that multiple penalties will be applied to a single tax return or year. Because of the severity of the impact of tax penalties, you need professional tax help to seek IRS penalty abatement if the IRS has imposed IRS tax penalties against you. Failure to act quickly to pay or attempt to raise valid arguments in support of reducing IRS tax penalties can lead to one or more of the following enforced collection activities:
Tax Liens— The IRS could file a tax lien against you which is a public notice to creditors and potential creditors that effectively prevents you from disposing of assets unless you pay your past due taxes to the IRS. Ironically, and sadly, tax liens may prevent you from getting the funds you need to pay your IRS taxes.
Wage Garnishment — The IRS can seize cause your employer to pay over wages to the IRS to satisfy your past due taxes. (Learn more about wage garnishment relief)
IRS Seizures and Levies — The IRS also could seize your bank account directly or take possession of other assets, and notably they could do so without a judgment of liability against you – in other words even if they are wrong about your back tax liability.
Explore Your Options For Tax Penalty Abatement Today
In light of the severe consequences of failing to pay IRS tax penalties, you should seek and obtain professional IRS tax help to assist you with your IRS penalty abatement if you’re faced with IRS tax penalties. There may well be mitigating circumstances that we can identify that may entitle you to a reduction in IRS tax penalties through established IRS penalty abatement procedures. Contact us for a FREE consultation about your potential IRS penalty abatement.
The Seattle Pure Tax team