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The Internal Revenue Service (IRS) will impose tax penalties on those who fail to file or pay their taxes in a timely manner. If you are being charged tax penalties, it’s important to consult with an attorney to determine if you qualify for relief from these fees. This is especially important if you are already struggling to pay a tax debt that you have incurred. Call or email Tax Debt Fixer LLC today to review your case and learn about your legal options.
Los Angeles Attorneys Outline the Many Types of Tax Penalties
The IRS has several different types of penalties that they may choose to impose on taxpayers in the U.S. The first type is the failure to file penalty, which is imposed on any taxpayer that fails to file his or her tax returns by the deadline. This penalty is typically 5% of your unpaid taxes for each month, which will start to accrue the day after the deadline has passed. The failure-to-file penalty will not exceed 25% of your unpaid taxes.
Another type of penalty that you may face is the failure-to-pay penalty, which is imposed on any taxpayer who does not pay his or her tax debt in full by the filing deadline. This penalty is usually 0.5-1% of your unpaid taxes per month. If you fail to pay and fail to file on time, the maximum penalty that will be imposed by the IRS will be 5% of your unpaid taxes per month.
These are the most common types of penalties imposed by the IRS, but they are far from the only ones. The IRS can also impose penalties after discovering discrepancies during tax audits. For example, if the tax audit reveals that you grossly underreported your income on your return, you may be penalized for this error. This penalty can be high as 20-25% of your unpaid taxes.
Skilled Los Angeles Tax Lawyer Explains Who is Eligible For Tax Penalty Relief
The IRS will reduce or remove tax penalties in certain situations. You may qualify for penalty relief due to statutory exception if you are able to prove that bad advice from the IRS led to your penalty. For instance, let’s say someone from the IRS informed you that your deadline extension was approved when it was not. If you can prove that this happened, the IRS may remove your failure-to-file penalty since you were under the impression you had an extension.
Taxpayers may also be approved for a first-time penalty abatement. If you have filed all required returns, paid or arranged to pay the outstanding tax debt, and have not had any tax penalties within the last three years, you should qualify for this type of relief.
There is one more way in which you may obtain relief from tax penalties. If you can prove to the IRS that you had reasonable cause to fail to pay or file on time, the IRS may reduce or remove your penalty. What exactly is reasonable cause? It varies on a case-by-case basis. Some examples include natural disasters, the death of an immediate family member, or a serious illness.
Experienced Lawyers Can Help Qualified Individuals Eliminate Tax Penalties
An attorney’s first priority should be determining if you qualify for tax penalty relief. If you do qualify, your attorney has the option of pleading your case to the IRS over the phone or by submitting a written petition or completed form 853. Many attorneys prefer the written petition option because it gives them the most freedom to explain your situation and convince the IRS that you should receive relief.
If you don’t work with an attorney, it’s very likely that you will not include enough information for the IRS to understand why you are in need of relief. You may also forget to submit supporting documents, especially if you are obtaining relief due to reasonable cause. For instance, if your reasonable cause is a natural disaster that caused significant damage, you will need to submit proof that this actually occurred. The IRS expects to receive documentation that shows what happened, when it happened, and how it affected your ability to comply with deadlines.
Before contacting the IRS regarding your tax penalties, consult with an attorney in the state of California to learn how to present your case.
When Should You Contact the Best Law Firms in Los Angeles For Assistance?
In general, it’s recommended that you get in touch a tax attorney as soon as you find out that the IRS is imposing penalties. As soon as you contact an attorney, he can begin to review your case to determine whether you qualify for tax penalty relief.
Contact Our Top Law Firm To Schedule An Initial Consultation Today
If you are facing tax penalties, it’s imperative that you seek legal representation from an attorney at law as soon as possible. Tony Adderley is a skilled tax penalties attorney with over 20 years of experience who is dedicated to helping you achieve the best possible outcome in your case.
Tax Debt Fixer LLC represents clients in Orange County, Los Angeles County, San Bernardino County, and Riverside County. Some of our practice areas include innocent spouse relief, offer in compromise agreements, bank levies, tax liens, tax appeals, and other tax law issues.
We welcome all of our new clients to schedule an initial consultation to learn more about our professional legal services. During this meeting, we will carefully review your case and discuss your rights and legal options. Schedule your consultation by calling our office at (310) 341-4410 or filling out the online form on our website today.