Penalty Abatement

Assistance Reducing Eligible IRS Penalties

IRS penalties can cause a tax balance to grow quickly. Penalties may be added for filing a return late, paying taxes after the deadline, failing to make required payroll tax deposits, or not meeting other federal tax obligations.

Although the underlying tax may remain due, some taxpayers may qualify to have eligible penalties reduced or removed. 701 Tax Resolution helps individuals and business owners in Valley City and throughout North Dakota evaluate whether penalty abatement may be available.

The IRS may consider penalty relief based on a taxpayer’s previous compliance history or reasonable cause. Reasonable cause is determined by reviewing the facts and circumstances that prevented the taxpayer from filing or paying on time.

Circumstances may include a serious illness, death in the immediate family, natural disaster, unavailable records, extended absence, or another event outside the taxpayer’s control. The IRS typically considers what happened, when it happened, how it affected tax compliance, and what steps were taken to correct the problem.

A general statement that the taxpayer could not pay or did not understand the requirements may not be enough. An effective request should clearly explain the situation and include documentation when available.

701 Tax Resolution can review IRS transcripts and notices to identify the penalties assessed and determine whether they may qualify for relief. We can prepare the abatement request, organize supporting records, communicate with the IRS, and review additional options if the initial request is denied.

Penalty relief generally applies only to the penalty portion of the debt. The original tax balance and applicable interest may remain due. However, reducing eligible penalties may make the overall balance easier to resolve through an installment agreement or another tax-relief option.

Do not assume every penalty assessed by the IRS must remain on your account. Reach out to 701 Tax Resolution to schedule a consultation and have your tax penalties reviewed.