Form 2220 Payments 2023-2024

IRS penalty abatement is a process that should be considered in almost every IRS problem resolution case. However, there are certain situations where penalty abatement may not be applicable. For instance, if the case is being resolved through full payment or bankruptcy, penalty abatement may not make sense. Additionally, if the entire case is being settled through an accepted offer and compromise, penalty abatement would not be necessary. If you are entering into an installment agreement or experiencing hardship, where the IRS will not seek collection but penalties and interest will continue to accrue, it would be wise to request penalty abatement. It is important to note that penalty abatement can be requested for both personal and payroll taxes. The criteria for penalties to be abated is the reasonable cause standard, which means that despite exercising ordinary business care and prudence, something unforeseen occurred that led to the failure to file or pay taxes on time. To request penalty abatement, it is crucial to provide a reasonable explanation for why the penalties should be abated and why the taxes were not filed or paid on time. For instance, if a hurricane caused the loss of business records and hindered the ability to file and pay taxes, that would be considered a reasonable cause explanation. However, it becomes increasingly difficult to achieve penalty abatement as the duration of non-compliance lengthens. If there is a track record of several years of not filing or paying taxes, it is unlikely that penalty abatement will be granted, regardless of the circumstances. The response time for penalty abatement requests can vary from 90 to 180 days. It is common to receive a letter from the IRS stating that full payment of taxes must be made before considering the abatement request. However, this is an incorrect interpretation of the law....