Reducing IRS Debt through Penalty Abatement

Last updated on May 30, 2022

Tax debt resolution can sometimes involve the reduction of a tax debt amount, a reduction of penalties, and/or the forgiveness of a tax debt. Even though a reduction or a forgiveness of an IRS debt is achieved taxpayers who clear strict qualifying guidelines, taxpayers can make efforts to get their penalties reduced or forgiven to reduce their total tax debt amount.

There are no strict guidelines that determine the qualification of a Penalty Abatement. Whether the IRS qualifies a request for a Penalty Abatement depends on the discretion of the IRS, but to increase the chances of getting accepted, taxpayers should consider having a ‘reasonable cause’ for the non-compliance. Reasonable causes include hardships that forced the taxpayer to non-compliance, natural disasters, personal tragedy, or other adverse circumstances resulting in the taxpayer not complying with tax rules. The IRS considers the authenticity of claims and the reason for non-compliance before approving a taxpayer for a Penalty Abatement.

To increase the chances of getting IRS penalties reduced or forgiven, many taxpayers hire help from tax resolution services. A tax resolution service studies, prepares, and negotiates a tax case before the IRS with the aim to achieve the maximum IRS debt reduction.

A Penalty Abatement is an important part of IRS debt reduction that allows many taxpayers to comfortably pay back their tax debt. It is an option open to any taxpayer looking to resolve their tax debt.