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While the IRS is notorious for dolling out harsh penalties, there are smart ways to avoid these penalties that ultimately result in very high fines. Here are some helpful tips to effectively and efficiently avoid any potentially harsh IRS penalties.
For most people, the IRS is a confusing and frightening government entity. In fact, many people are unaware of how taxes and the IRS ultimately work. But, it doesn’t have to be such a big, scary beast. While the IRS is notorious for dolling out harsh penalties, there are smart ways to avoid these penalties that ultimately result in very high fines. Here are some helpful tips to effectively and efficiently avoid any potentially harsh IRS penalties.
First-Time Abatement
Is this your first time dealing with an IRS issue? If so, you might just be in luck. If you’ve just received a failure to file or failure to pay fine, and it’s the very first time you’ve received one of these, you may be able to get out of the penalty associated with them. In fact, all you have to do would be to send a letter to the IRS explaining that this is, in fact, the first time you are receiving such a penalty and they should give you the abatement you so desperately desire. However, it’s important to note that this type of strategy can ultimately solely be used once — based on the understanding of the abatement process itself.
Any Reasonable Cause
Another way to avoid any IRS penalties is to provide a reasonable cause. In fact, when it comes to reasonable cause, there are a few considerations that must be taken. You can ask the IRS for a certain type of forgiveness if you can clearly give a legitimate reason as to why this should be the case for you. What’s important is to make sure you use keywords and buzzwords that are persuasive and help to explain the circumstances associated with why forgiveness should be granted to you.
Partnership Relief
This is typically used for businesses — excluding S corporations. In fact, many companies can benefit from filing for partnership relief to avoid having to deal with IRS penalties. The reality is, there are specific requirements your business will need to meet in order to actually qualify to file for this specific type of forgiveness, so be sure to check with your CPA or accountant to ensure your business qualifies — or what to do to help your business qualify.
trust the professionals at the harding group
Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for emails or phone calls and will strive for open communication with our clients. Whether you are interested in business advising, tax preparation, bookkeeping and accounting, payroll services, Training + support for QuickBooks, or retirement planning, we have the expertise and years of experience to help. We serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of taxes, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on Facebook, Twitter, YouTube, and LinkedIn.