Avoid Income Tax Penalties For Debts Owed To The Tax Authorities

 

Small tax arrears quickly become a financial nightmare when the government imposes an income tax penalty on the tax authorities. Suppose you fail to pay your tax debts to the IRS. The penalties and interest increase considerably. However, if you feel that you have acted "in good faith" and with "reasonable cause", you can apply for an IRS penalty waiver, and your back income taxes will be forgiven.

Table of Content

  1. What Is An Income Tax Waiver?

  2. Applicants Eligible for Income Tax Forgiveness

  3. Applying to Cancel an Income Tax Penalty

  4. Conclusion

What Is An Income Tax Waiver?

Sometimes you cannot pay your taxes (IRS debt) on time to the tax authorities. An income tax waiver requests waiving all or part of the penalties and interest owed to the IRS for delinquent taxes. On average, the income tax penalty is about one-fourth of the total amount of the tax (IRS). Often, individuals can pay the first tax debt to the IRS. Income tax penalties are too high: the IRS has assessed more than $15 billion in income tax penalties against taxpayers. Don't let the government force you to pay the IRS more than you owe. Please don't allow them to take advantage of you because of your tax debts (IRS)!

Examples of Applicants Eligible for Income Tax Forgiveness

There are many things in life. We are all aware of this. Perhaps you've had a family mishap or been misguided by a tax advisor (IRS debt) you thought you trusted. In these circumstances, there should be no income tax penalty. Other factors include:

• Natural disasters (e.g., fire, earthquake, flood).
• Loss or damage to financial records.
• Fixed income.

Generally, these factors are beyond your control and directly cause your inability to pay your tax debt to the IRS. It means to act "in good faith" and "with good reason." You are not "evading" taxes (debt to the IRS). You acted honestly and in good faith regarding your tax debt but did not pay what you owed the IRS.

Applying to Cancel an Income Tax Penalty

To request cancellation of a tax penalty (a debt owed to the IRS), you need Form 843, Application for Refund, and Request for Cancellation of Penalty. You and your spouse must sign the form if you are applying to cancel an income tax penalty as part of a joint return. After receiving your application, the Federal Tax Administration official will determine your tax liability and the amount you owe the Federal Tax Administration. Be sure to attach all schedules and keep copies of all information for your records. If you apply for income tax forgiveness, you will at least be able to pay all your delinquent taxes (IRS debt) without penalty or interest.

Conclusion

If you are behind in paying your taxes (IRS), dealing with the IRS can be very emotional and frustrating. That's why you should always consult a tax debt specialist if you consider getting your income tax penalty forgiven. The amount you legally owe the IRS and the amount the IRS is trying to collect from you can be two very different things. It is always a good idea to have a tax specialist on your side who can resolve your situation quickly and efficiently.