IRS Penalties: There Are Legal Ways to Get Them Removed
IRS penalties compound like interest on a bad credit card. Failure-to-file: 5% per month. Failure-to-pay: 0.5% per month. Add interest on both. Your original $20,000 tax bill becomes $35,000 before you know it. The IRS has specific legal grounds for removing penalties. I use them.
Reasonable Cause Abatement
If you had a legitimate reason for failing to file or pay — serious illness, natural disaster, death in the family, reliance on bad professional advice — the IRS can remove penalties. The key is documentation and knowing how to present the case.
First-Time Abatement
If you have a clean three-year compliance history, you qualify for first-time penalty abatement. The IRS doesn't advertise this. Most taxpayers never ask. I request it on every qualifying case.
The Financial Impact
Removing penalties also removes the interest that accrued on those penalties. On a large tax bill, penalty abatement can save tens of thousands of dollars. It's one of the highest-value services I provide.
Written Submissions
I prepare formal penalty abatement requests citing specific IRM provisions and legal authority. If the initial request is denied, I appeal. My success rate on penalty abatement is high because I only request it when the facts support it.