Thursday, December 13, 2007

Penalty Abatement? What is it ?

Have you ever ask yourself some of the below common questions? Need IRS Help or a tax consultant ?
1.If I offer to pay the tax, will the IRS just forget the penalties and interest?
2.Can I pay the tax and ask the IRS to waive the penalties?
3.Can we settle on the tax and forget the penalties?
4.DO penalties and interest accrue on the outstanding balances?
5.What can I do to get rid of the penalties?
6.Do I qualify for relief of some of the penalties?
Finally, what are my chances of penalty relief?

If you have asked yourself these questions, you are not alone. The common person does not quite grasp what all entails in "granting"penalty abatement ( removal of accrued penalties from what is owed). Did you know that the amount of penalties abated in 2006 were around $11.1 billion dollars? The most common penalties are the following:

*Failure to Pay
*Failure to File
*Estimated Tax
*Federal Tax Deposits
*Accuracy is low on the list
*Most abatable according to statistics:
- Failure to file
-Failure to deposit (employment taxes)
Penalties are imposed to foster compliance with your returns! This is not a revenue generating instrument.Most are civil penalties imposed to deter non compliant behavior.Bare in mind that penalties are in addition to interest due.

Stay tuned for more information on the details of abating interest and penalties !

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