Sunday, February 17, 2008

Penalty and Interest Abatement

It is very common that taxpayers assume that penalties can be abated at any given time. But in reality there is only a 5-10% chance of receiving penalty abatement. Of this percentage, a taxpayers needs to have their balances paid in full.Most taxpayers don't realize why the IRS enforces penalties.Penalties are imposed to foster complaince. Most of te penalties are civil penalties set in place to deter non-compliance clients.
Interest is another way to accrue a significant amount of money for delinquent taxpayers that owe back taxes.Unlike penalty abatement, penaltiy interest is more difficult to get abated. The only way the IRS will abate interest is by an erronious error made by only the IRS. If this were to happen, the taxpayer would need to have this error in writing for legality reasons. Statistics show that 41% of penalty abated monies;13 out of 100 are abated. This is not a large amount. Keep in mind that the IRS should not be considered as a financial institution that issues free loans. The amount you owe will be paid in full and then some !If you have questions about penalty abatement and a more in depth meaning, contact a professional tax consultant today!

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