Using a Penalty Abatement Letter
When you have been given an IRS penalty, you need to know what you can do about it. The vital instrument you need to challenge your penalty is called a Penalty Abatement Letter. There is no set wording to such a letter but here are a few tips that may result in your request being granted.
In the IRS there is a coordinator in charge of handling all the Penalty Abatement letters they receive. So your letter must describe the actual circumstances pertaining to your financial problems. Talk about why you ended up getting the penalties you did and above all else, be honest. Honesty is always the best approach to take when drafting your letter because this will stand you in good stead with the coordinator.
Along with being honest, you should describe the hardship that the IRS penalty has had upon your life and that of your family's without being too melodramatic; the coordinator does not need tear-stained stories of hardship and woe. Hyped up stories belong to Hollywood, so stick to the facts. A brief letter has been shown to be more effective than a 10-page, emotionally charged tale of financial sorrow. The more direct and honest you are, the better off you will be when it comes to getting your money back.
Be frank in your Penalty Abatement letter about how you ended up in the financial mess you are in. At all times, you should take responsibility for your decisions and actions that have led you to your present circumstances. If your letter comes off like a blame game where everyone else is responsible for your financial problems except you, then the IRS is not likely to be sympathetic towards you. If you sound like a person who has made a mistake, someone who knows what he did wrong, why it was wrong and pledges to never do it again, you will be considered far more worthy of help.
If you have had to struggle with unexpected tragedies like serious illnesses, major accidents etc, do attach relevant documentary proofs like hospital bills, insurance letters and so on to explain your difficulties. Send only copies of such documents and not the originals. Stick to the facts and be honest. Do not get too emotional explaining your circumstances. More often than not these Penalty Abatement letters are accepted, but your chances will be greatly improved if you follow the advice above.
Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.
Most Commented Posts
Filed under IRS Problems by 
Leave a Comment
Comments on Using a Penalty Abatement Letter
Here are the most important factors: tell the IRS that you have never made this mistake before, what you are going to do to make sure the mistake never happens again, and then tell them that the mistake never would have happened in the first place except for… If you have a good medical reason, then discuss it at length, the medications you are taking, the side affects of the medication, evaluations from the doctor, printouts from webmd.com, etc. The other possible exception is for bad advise, this one is a bit more difficult, you might want to look up the rules first, just do your best, remember that the IRS does not review any of these letters, the IRS has an employee do it, and sometimes it just depends on how that employee feels that day.