IRS Penalties & Interest

Removal of Penalty and Interest
Reasonable Cause

Remove Tax Penalties and Interest:

Facing steep tax penalties and interest charges from the Internal Revenue Service (IRS), California Franchise Tax Board (FTB), or California Department of Tax and Fee Administration (CDTFA)? These additional costs can often surpass the original tax debt, creating a significant financial burden. At Tax Lawyers Group APC, our Los Angeles-based tax attorneys specialize in securing tax penalty and interest abatement, helping clients reduce or eliminate these charges and regain financial stability. With extensive experience and a strategic approach, we craft compelling tax penalty abatement requests backed by thorough documentation and persuasive arguments.

Understanding Tax Penalties and Interest

The IRS, FTB, and CDTFA impose tax penalties and interest to enforce tax compliance and compensate for delayed payments. These charges can accrue rapidly, significantly increasing your tax liability. Common reasons for tax penalties include:

• Late Filing: Failing to file tax returns by the due date (or extended deadline).
• Late Payment: Not paying taxes owed by the deadline.
• Substantial Understatement: Underreporting income or overstating deductions, leading to a significant tax discrepancy.
• Valuation Misstatements: Incorrectly valuing assets or deductions, such as in estate or gift tax filings.
• Accuracy-Related Penalties: Errors due to negligence or disregard of tax rules.
• Fraud Penalties: Intentional underreporting or evasion, which carries severe consequences.

Interest, on the other hand, is charged on unpaid taxes and penalties, compounding daily based on federal or state rates. In many cases, the combined penalties and interest can dwarf the original tax debt, making it critical to address these charges promptly.

Fortunately, the law allows for tax penalty and interest abatement under specific circumstances, such as “reasonable cause” for penalties or IRS errors for interest. However, securing relief requires a well-documented, persuasive request submitted under penalty of perjury. At Tax Lawyers Group APC, our Los Angeles tax attorneys have a proven track record of successfully obtaining penalty and interest abatements, saving clients multi-million dollars.

Grounds for Tax Penalty Abatement

The IRS, FTB, and CDTFA may remove or reduce tax penalties if you demonstrate “reasonable cause”—a legitimate reason for non-compliance that was beyond your control. Common circumstances that may qualify include:

1. Reliance on IRS Written Advice: You followed written guidance from the IRS, FTB, or CDTFA that led to a penalty, such as advice received during a consultation or in a publication.
2. Death or Serious Illness of a Family Member: The death or severe health condition of a close family member (e.g., spouse, parent, or child) disrupted your ability to file or pay taxes on time.
3. Personal Mental or Physical Illness: A documented medical condition, such as hospitalization or chronic illness, prevented you from meeting tax obligations.
4. Drug or Dependency Issues: Substance abuse or related dependency problems impacted your ability to comply, provided you can show efforts toward recovery.
5. Reliance on a Negligent Tax Professional: You hired an accountant or tax advisor who provided incorrect advice or failed to file or pay taxes correctly, despite your reasonable reliance on their expertise.
6. Extended Military Service: Active-duty military service, especially in a combat zone, interfered with your ability to manage tax responsibilities.
7. Other Reasonable Causes: Additional circumstances may qualify, such as natural disasters, casualty losses (e.g., fire or flood), or unavoidable absences (e.g., incarceration). The key is to demonstrate that you acted in good faith and that the issue was beyond your control.

Each case is unique, and the outcome depends on the strength of your argument and supporting evidence. Proper documentation—such as medical records, correspondence with tax professionals, or proof of external events—is critical to proving reasonable cause.

Interest Abatement: Addressing IRS, FTB, CDTFA Errors

Unlike tax penalties, interest charges are rarely abated because they are statutorily required on unpaid taxes. However, the IRS, FTB, or CDTFA may reduce or eliminate interest if it resulted from:

• Ministerial or Managerial Errors: Delays or mistakes by the taxing agency, such as processing errors, incorrect notices, or failure to apply payments properly.
• Erroneous Advice: Interest accrued due to incorrect written advice from the agency.
• Unreasonable Delays: The agency took an excessive amount of time to resolve an issue, causing unnecessary interest to accumulate.

Interest abatement is more limited than penalty abatement, but our tax attorneys at Tax Lawyers Group APC meticulously review your case to identify any agency errors or procedural missteps that justify relief.

The Penalty Abatement Process:

Securing tax penalty or interest abatement requires a formal request backed by a detailed report of facts, circumstances, and supporting evidence.

1. Case Evaluation: We conduct a comprehensive review of your tax records, penalty notices, and financial situation to identify grounds for abatement. This includes analyzing correspondence with the IRS, FTB, or CDTFA and gathering relevant documentation.
2. Evidence Compilation: We help you collect and organize supporting evidence, such as:
   • Medical records or doctor’s letters for health-related claims.
   • Death certificates or obituaries for family member claims.
   • Correspondence with tax professionals to demonstrate reliance.
   • IRS or state agency notices showing errors or delays.
   • Military service records or other proof of extenuating circumstances.
3. Persuasive Request Preparation: We draft a detailed abatement request, submitted under penalty of perjury, that clearly outlines the reasonable cause or agency error. Our attorneys use compelling legal arguments and cite relevant tax code provisions to strengthen your case.
4. Submission and Negotiation: We file the request (e.g., IRS Form 843, Claim for Refund and Request for Abatement, or equivalent state forms) and engage with the taxing agency to advocate for approval. If the initial request is denied, we pursue appeals or alternative resolutions.
5. Ongoing Support: After securing abatement, we provide guidance on maintaining tax compliance and addressing any remaining tax obligations, such as through installment agreements or Offers in Compromise.

Our meticulous approach ensures that your request is thorough, well-documented, and tailored to the specific requirements of the IRS, FTB, or CDTFA.

Why Choose Tax Lawyers Group APC?

At Tax Lawyers Group APC, our Los Angeles tax attorneys bring unparalleled expertise and a client-centered approach to tax penalty and interest abatement. Here’s why we’re the trusted choice for tax relief:

• Specialized Knowledge: Our team has extensive experience navigating IRS, FTB, and CDTFA regulations, with a deep understanding of penalty and interest abatement criteria.
• Proven Success: We have successfully secured penalty and interest reductions for countless clients, saving them significant amounts and preventing further financial strain.
• Comprehensive Analysis: We leave no stone unturned, thoroughly reviewing your case to identify all possible grounds for relief and gathering robust evidence to support your request.
• Strategic Advocacy: Our attorneys craft persuasive arguments and negotiate with taxing agencies to achieve favorable outcomes, even in complex or challenging cases.
• Holistic Solutions: Beyond abatement, we explore additional relief options, such as Offers in Compromise, tax bankruptcy, or lien releases, to fully resolve your tax issues.

Our commitment to personalized service and attention to detail sets us apart. We understand the stress of facing mounting penalties and interest, and we’re dedicated to helping you achieve a fair and affordable resolution.

Common Scenarios for Tax Penalty and Interest Abatement

While every case is unique, certain scenarios are particularly well-suited for abatement:

• Medical Emergencies: A taxpayer hospitalized during the tax filing period missed deadlines due to a documented illness, qualifying for penalty relief.
• Erroneous IRS Advice: A taxpayer relied on an IRS publication that misstated a deduction rule, leading to an accuracy-related penalty that can be abated.
• Tax Professional Misconduct: A taxpayer hired an accountant who failed to file returns on time, despite receiving all necessary documents, providing grounds for reasonable cause.
• Agency Errors: Interest accrued due to an IRS delay in processing a payment, justifying an interest abatement request.

Remove Your Tax Penalties and Interest

Don’t let tax penalties and interest spiral out of control. With the right strategy and expert representation, you can reduce or eliminate these charges and regain financial stability. At Tax Lawyers Group APC, our Los Angeles tax attorneys are ready to fight for your relief from IRS, FTB, or CDTFA penalties and interest.

Contact us today at (310) 788-9820 or email us to schedule a confidential consultation. We’ll review your case, identify grounds for abatement, and develop a tailored plan to minimize your tax burden. Our Los Angeles tax attorneys have successfully represented clients in these and other scenarios, leveraging our expertise to secure substantial tax relief.