December 21, 2007 Removing Penalties and Interest Charges – Can you do that? 10 Be Sociable, Share! Tweet Related Posts3 Ways to Rid Yourself of IRS Debt and Its Accruing Interest and PenaltiesPenalty AbatementIRS Penalties – Can You Get Rid of those darn Penalties??File Tax Returns even when LateRemoving a Federal Tax LienZemanta Filed under IRS Penalties by Darrin Mish Comments on Removing Penalties and Interest Charges – Can you do that? February 18, 2008 Kathy @ 12:47 pm My husband had taxes prepared by an accountant in 2003–unfortunately he never filed them. Now–we owe triple the amounts on both federal and state. We were married at the time but filed separately. I believe we have a case as to why the returns were not filed. We have been trying to work with the IRS but are getting nowhere. I did sent a letter asking for abatement of penalties and interest (I did not fill out the form mentioned IRS form 843). All previous years prior to and after 2003 were filed appropriately for him. Any thoughts? Darrin Mish @ 2:05 pm You need to prepare a penalty abatement letter. You do not need a form 843. You should be prepared to explain why you should have your penalties forgiven despite the fact that you filed and/or paid late. The standard is that even though you exercised reasonable business care and prudence something happened that you could not have foreseen that caused you to file and/or pay late. March 9, 2010 Lisa @ 3:57 pm I've been researching online and something is still not clear to me…..suppose someone submits tax returns in fall of 2000. The tax might be assessed sometime in 2002. Penalties and interest will continue to accrue over the 10-year statute period. Do ALL of the penalties and interest disappear when the statute of the initial tax is expired, or do the 10 years of penalties and interest fall off at the end of each year over 10 years? Thank you Darrin Mish @ 4:53 pm Lisa, Good question. The penalties and interest expire when the underlying tax assessment expires. For example, let's say a taxpayer filed a return with a balance due on April 15, 2002. A ten year statute begins to run and if no tolling factors arise, the statute would expire on April 16, 2012. Now let's say our taxpayer was audited and additional tax was assessed on July 5, 2004. An additional collection statute would begin to run on that assessment, and assuming no tolling factors, it would expire on July 6, 2014. The penalties and interest attributable to EACH assessment expire when the collection statute for that assessment expires. I hope this answers your question. Thanks for asking it! Lisa @ 5:45 pm Thank you – I appreciate the prompt and thorough response. I have another question: in Nov of 1998 my wages were garnished by the IRS and I had to call them. In the course of collection my income and expense info, the agent asked when my car would be paid off and I told her. She said that when it is paid off I have to send the amount of my car payment to them. Would I need to make payments only until the statute expires, or would my sending them payment open another 10-year can of worms? Thanks again. March 12, 2010 Darrin Mish @ 2:43 pm Only until the Collection Statute expires. May 25, 2010 tracy @ 10:47 pm Hi, I filed my 2007 taxes on time in 2008 with an amount due (which I would need to make payments on) by regular mail. I never heard from them and did not even think about it with normal life taking over, my fault. I filed again in 2008, again never heard from them and filed by regular mail. I should have called them but didn\'t. I know it is no excuse but I am a 3/4 time student and full time military with the normal family obligations. I filed this year sending it return receipt and certified and they received it. Now, I am obviously being charged penalties and interest. Do I have a chance for abatement? Thank you for any help! June 3, 2010 Darrin Mish @ 10:58 am You could always request an abatement. Most likely you would get at least the first year's penalties abated. December 16, 2010 tim @ 9:38 am hi Mr. Darrin My wife filed in 2008 with Turbo tax and entered the final amount incorrectly and now we both are on unemployment can this help with removing penalties from the IRS using the 843 form February 8, 2011 Darrin Mish @ 3:13 pm You wouldn't use the form 843 for a penalty abatement for personal income tax. But you certainly can send in a penalty abatement request due to your particular hardship situation.