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There are a lot of false promises being made to consumers
by representatives concerning the removal of interest and penalties. Many people
use that as a way to justify paying representation fees." If you can save me
$20,000. of interest and penalties, I will gladly pay you $2,000." is an
example. Unfortunately, interest is hardly ever waved, and penalties are not
waved nearly as often as people are led to believe.
IF YOU ARE CONSIDERING HIRING US-CALL ME - JOE MASTRIANO, CPA 713-774-4467
THINK AGAIN For your FREE analysis click here to e-mail me
REPRESENT YOURSELF BEFORE THE IRS
Penalties
Removing penalties on your first late personal tax return form
1040 should be easy. It's pretty much a given. After you pay the liability you
can call and request a penalty removal. Just tell them that you forgot to file
on time, or thought that you did. Or you could fill out form 843 claim for
refund. You have to write the form number in and select other on line 3b.
I would still try to prove reasonable cause and not willful negligence was the
reason.
Use form 843 for any years of personal returns, or other
returns, you want to claim a penalty abatement for.
Interest
Interest is charged when there is a balance due. When a tax
liabilities is reduced or abated, the corresponding interest will be too. When a
penalty is abated, the interest on that penalty must be abated too. Interest can
be abated if it can be shown that it is attributable in whole or in part to an
unreasonable error or delay by an officer or employee of the IRS. You have to
prove...
a) that the error or delay occurred in connection with 'a procedural or
mechanical act' or a 'managerial act' associated with the case.
b) The error or delay occurred after the IRS contacted the
taxpayer 'in writing' about the case.
c) No 'significant aspect' of the error or delay can be
attributed to the taxpayer's actions.
If you want to request relief of interest charged due to an error or delay I
encourage you to do so. I have never attempted to do this given the IRS posture
in defending these claims. It is hard for an honest practitioner to justify
charging the fees necessary to defend this, given the odds against it. You of
course can try this on your own. I would look further into how cases are settled
and what the taxpayer advocate has to say about it. A lot of research will be
necessary. You can always appeal a decision against you if the facts are
in your favor.
The three ways to reduce your tax liability in general are:
a) Pull your record of account and make sure the IRS has
recorded your payments. Make sure if they removed any penalties they took off
the related interest. Make sure you file original returns for any years that
they filed a SFR (substitute for return). Make sure you file original reports
for any payroll report, under code 6020b that the IRS filed.
b) Amend any returns that you think are not correct. Submit
proof with the return and your copy of new return and the amended version. Do not
be afraid of an audit by doing this. Submitting your documentation will prove
your case, so they will see little chance in auditing you.
c) Apply for penalty abatements according to the instructions
in this site.
For more information, please see the
"Appeals"
page.
IF YOU ARE CONSIDERING HIRING US-CALL ME - JOE MASTRIANO, CPA 713-774-4467
THINK AGAIN For your FREE analysis click here to e-mail me
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