Penalty Abatement Used to Resolve Tax Debt - Professional Tax Resolution

Penalty Abatement Used to Resolve Tax Debt

Penalty Abatement Used to Resolve Tax Debt

Taxes are so frightening to many Americans that they choose a flight over fight response. Instead of facing their tax filing obligations and back tax issues head on, they choose to avoid them in hopes that they will go away. Unfortunately, this approach does not work in the long run. In addition to accumulating interest charges and late filing and payment penalties, a delinquent taxpayer will eventually be faced with some sort of enforced collection activity by the IRS. Such was the case with Ms. F who avoided filing tax returns for 10 years due to external financial issues. Eventually, the IRS contacted her and informed her that she owed a back tax balance of over 100k!

Frightened of the potential consequences of ignoring her tax obligations and unsure of how to respond to the IRS, Ms. F contacted Professional Tax Resolution for help. After a phone conversation and a face-to-face consultation, our tax professionals immediately began preparing and filing her back tax returns. Once this task had been completed, she owed the IRS $26,000. Although this was far less than the $100,000 that was on the books before the returns were filed, it was still exceeded her ability to pay.This being the case, Ms. F would have been in the same tax debt trap she was in before she contacted us if our tax specialists not continued to work on her behalf to bring the amount down.

Professional Tax Resolution approached the situation by requesting to have some tax penalties abated. Due to death and illness in her family, we realized that Ms. F might be a candidate for a penalty abatement which is a tax settlement option that provides for a reduction in tax penalties when a taxpayer meets certain qualifications. Since a large portion of any back tax balance is often the result of the accumulation of interest and penalties, applying for a penalty abatement can be one of the most productive forms of tax debt resolution. That being said, penalty abatements are only granted under certain conditions that difficult to document. However, our professionals know what is required and were successfully able to negotiate a penalty waiver that reduced Ms. F’s tax debt from $26,000 to $9,000, an amount she could afford to pay!

In addition to falling behind on her personal tax returns, Ms. F was also delinquent in filing the tax returns for her business. This eventually resulted in her corporation being listed as inactive with the Secretary of State and placed her business retirement plan at the risk of being levied. However, due the quick response on the part of the staff at Professional Tax Resolution, no collection activity took place and the retirement plan was left untouched. Once our tax resolution team had prepared and submitted all corporate income tax returns and the company was promptly reactivated with the Secretary of State.

The case of Ms. F and her business illustrate Professional Tax Resolution’s personalized approach to tax debt resolution. We are always focused on helping our clients with whatever unique financial situation they may present. Our professionals understand that it might not be an easy one or two fix situation and that clients may need a series smart tax decisions to help them resolve all of their back tax issues.

If you have tax questions or a tax debt you are unable to pay, our tax settlement professionals are happy to discuss your tax resolution options free of charge. For more information about our services, visit us today at or call us at 877.889.6527. With over 16 years in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which settlement option will be the best fit for your specific set of circumstances.