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Penalty Abatement is the process of eliminating or reducing penalties assessed up by the IRS on taxpayers. For most penalties a standard called “reasonable cause” is what is required to accomplish Penalty Abatement. Reasonable cause means that despite “the exercise of ordinary business care and prudence,” a taxpayer was faced with a situation in which they could not file their tax return, or pay their taxes on time.
Normally a Penalty Abatement letter must be set to the IRS requesting the abatement of the penalties. The video discusses the process of filing the Penalty Abatement letter and the appeal process should that become necessary. Many taxpayers can benefit from the filing of a Penalty Abatement requests, especially if their track record with filing their tax returns and paying their taxes is a rather good one. The better the history of the taxpayer in filing the returns on time and paying their taxes on time, the better chance of success in the Penalty Abatement process.
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