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First Time Penalty Abatement relief qualification requirements

Among the things a person could face in connection to a tax problem is a tax penalty. Now, in some circumstances, a taxpayer may be able to receive relief from such penalties. There are multiple forms of tax penalty relief that the Internal Revenue Service can grant taxpayers. Each particular type has its own particular set of eligibility requirements. So, many things can impact whether a taxpayer would be able to qualify for one of these methods. Experienced tax lawyers can advise taxpayers who are facing tax penalties on whether they could be eligible for one of the IRS's tax penalty relief methods and can assist them with the process of pursuing penalty relief.

In today's post, we'll discuss one of the IRS tax penalty relief types: relief through the First Time Penalty Abatement policy.

The types of tax penalties that such relief can be applied to include: failing-to-pay penalties, failing-to-file penalties and failing-to-deposit-taxes penalties.

Not every taxpayer facing these sorts of penalties is eligible for such relief. Rather, whether a taxpayer might be able receive First Time Penalty Abatement relief depends on multiple things, including:

  • Where they currently stand when it comes to the payment of their taxes. If a person has any taxes due that they haven't paid or haven't made arrangements to pay, they cannot qualify for this penalty relief.
  • Where they currently stand when it comes to their tax filings. To qualify for this penalty relief, a taxpayer must either have filed all returns that are currently required for them or have filed for a filing extension for such returns.
  • Their tax penalty history. If a taxpayer has had any tax penalties issued for the three tax years preceding the tax year the penalty for which relief is sought is from, they are generally ineligible for this relief.

Now, if a taxpayer does not meet the eligibility requirements for First Time Penalty Abatement relief, this does not mean they have no chances of getting relief from their tax penalty. They may still qualify for other types of relief, such as the type we will be discussing in a post next week: reasonable cause relief.

Source: Internal Revenue Service, "Penalty Relief Due to First Time Penalty Abatement or Other Administrative Waiver," Accessed May 6, 2016

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