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Reducing Tax Debt with Penalty Abatement


Owing back taxes to the Internal Revenue Service (IRS) can take a significant financial and emotional toll on taxpayers and their families, especially if the IRS begins garnishing wages or imposing levies. Fortunately, there are options available, such as penalty abatement, that can help taxpayers manage their debt. Only qualified individuals can apply for the penalty abatement waiver, so if you have concerns about your tax debt, it is important to retain the services of an experienced Florida tax attorney who can help explain which programs are available to you.

Requesting Penalty Abatement

In an effort to incentivize future compliance with tax deadlines, the IRS automatically applies certain penalties to taxpayer debt. However, those who qualify for penalty abatement may be able to reduce the amount of penalties they owe in addition to the actual debt, which can go a long way towards helping taxpayers pay off their debts more quickly.

Unfortunately, not everyone is eligible to receive penalty abatement. To see if they qualify, applicants are required to complete and submit a request for abatement. As part of the request, each applicant must show reasonable cause for why penalty abatement should be applied to his or her debt. According to the Department of Revenue, cause is reasonable if the taxpayer exercised ordinary care and prudence, but was still unable to comply with relevant tax law.

When evaluating each taxpayer’s circumstances and determining whether reasonable cause exists, the Department will take a series of factors into consideration, including whether he or she:

  • Has initiated controls to promote proper future reporting;
  • Made payments in a timely manner during previous reporting periods;
  • Was ignorant of the law because he or she had a limited knowledge of business, limited education, or limited experience;
  • Relied upon advice received from a competent advisor as long as he or she provided the advisor with all necessary information and acted in good faith;
  • Reasonably relied upon the express terms of written advice provided by the Department of Revenue;
  • Relied on another person to comply with filing requirements or to prepare tax returns;
  • Was unable to comply due to death, illness, or incapacity of a member of his or her immediate family or of a person solely responsible for preparing returns and reports;
  • Was the victim of circumstances beyond his or her control, such as natural disasters, war, fire, or unavoidable absence;
  • Voluntarily disclosed tax liability before receiving notice from the Department; and
  • Failed to comply due to doubt of liability or collectability.

The list provided by the Department of Revenue is not exclusive, meaning that other explanations could qualify as reasonable cause if there is evidence that the taxpayer acted with prudence and used ordinary care.

Contact a Florida Tax Attorney Today

Many Florida residents are unaware that they qualify for penalty abatement of their tax debt. To find out whether you qualify, it is important to speak with an experienced tax attorney who can explain the requirements  for requesting abatement. If you live in the Daytona Beach, Orlando, Miami, or Jacksonville areas and you believe that you may qualify for penalty abatement, please contact Ronald Cutler, P.A. by calling 386-788-4480 to schedule a free consultation. If you cannot meet during the week, we will help you schedule a one-on-one weekend consultation with an experienced attorney.