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How to Waive Your Penalties with the IRS Using the First-Time Penalty Abatment

Reduce Your IRS Penalties – First-Time Penalty Abatement Waiver

Has the IRS charged you with a penalty relating to filing or paying your taxes? Have you always been compliant with the IRS in past years? If the answer is yes to both of these questions, than there may be a way for you to get your IRS penalty reduced or abated.

The First-Time Penalty Abatement Waiver (FTA) was created 13 years ago by the IRS to help administer the consistent and fair abatement of penalties, reward past compliance, and promote future compliance. The FTA can be used by first-time non-compliant taxpayers for any single tax period in which certain penalties have been assessed.

Although the First-Time Abatement was first introduced in 2001, many individuals and businesses are not aware of its existence and do not make use of it. In 2010, over 90% of individuals that would have qualified for the abatement did not receive the waiver because they did not file for it. THE IRS WILL NOT TELL YOU ABOUT IT UNLESS YOU ASK!

 

For individuals, an FTA may be requested for failure-to-file and failure-to-pay penalties. For businesses, an FTA may be requested for failure-to-file, failure-to-pay, and failure-to-deposit penalties. In order to qualify for a First-Time Penalty Abatement, an individual or business must meet the three clean compliance criteria. These criteria are as follows:

1.      Filing Compliance:

The taxpayer must have filed all currently required returns and they must not have an outstanding request from the IRS for an unfiled return.

2.      Payment Compliance:

The taxpayer must have paid, or arranged to pay, any tax that is due.

3.      A 3-year Clean Penalty History:

The taxpayer cannot have had penalties of a “significant” amount assessed in the prior three years on the same tax return. (In practice, any penalty is a significant amount)

If you have had a filing or payment penalty assessed against you, and you believe that you meet the preceding three criteria, you may be eligible for the first-time abatement waiver. In this case, you should contact a tax professional that can confirm that you qualify, and if so, further point you in the right direction.

In 2010, the average failure-to-pay abatement was $84, and the average failure-to-file abatement was $240. At Max Tax Agency, we will be glad to help you determine if you qualify for the first-time abatement waiver. If you have any concerns about any penalties that the IRS has assessed against you, we are here to answer your questions.

Benefits of Letting an Expert Prepare your Taxes

The Benefits of Hiring a Tax Professional

There are many benefits to hiring a tax professional rather than attempting to do your taxes on your own. Tax return preparation can be a complicated process and a professional can take care of that burden for you. Here are some of the many benefits that a tax professional can provide:

  1. Save Time and Money– Using a tax preparation specialist will undoubtedly help you save both time and money. For someone who is unfamiliar with tax practices, it can take an extremely long time to figure out what information the IRS is asking for in their forms. A tax professional can lead you in the right direction right away. In addition, they can use their knowledge to help you avoid overpaying taxes, or provide you with a greater refund.

 

At Max Tax Agency, we offer our services to all of the Miami and South Florida area. We guarantee that we will save our clients the most amount of money by providing them with the biggest refund possible. Our income tax preparers are both efficient and effective.

 

  1. 2.      Professional Tax Advice– Not only are tax professionals useful during tax season, they are useful all year round. Tax professionals can answer any of your tax questions or concerns at any time throughout the year. They can even help you formulate a plan during the year in order to achieve the most favorable tax consequences for the following tax season. Whenever you have an important financial decision to make, and are uncertain about the tax consequences, a professional will always be there to inform you of the potential outcomes.

 

Here at Max Tax Agency, we will gladly answer all of your tax questions year round. Whether you reside in the South Florida area, or anywhere else, we are always here for you. Through either a quick phone call, or a stop by our offices in Coral Gables, your questions can be answered right away by one of our knowledgeable tax specialists. In addition to tax services, we also are pleased to provide year round bookkeeping and payroll services to the Miami area.

 

  1. 3.      Reduce Errors– Through their extensive knowledge of tax laws, tax professionals can easily help you identify errors on your income tax returns. Correcting these errors could help you to get a bigger refund, but more importantly they can help you avoid adverse tax consequences in the future. By reducing the amount of errors on your tax return, the IRS will be less likely to choose your return for an audit. In the case of an audit, you will also have less personal liability if you choose to have your return prepared by a tax specialist.

 

Our tax professionals at Max Tax Agency have extensive knowledge of the tax laws, and can easily help anyone file the correct return in accordance with IRS requirements. We will gladly help you file and type of forms during tax season, as well as help you reduce possible errors in your business operations with our bookkeeping services.

 

  1. 4.      Ease the Burden– We know that you have a busy life and that the last thing you want to do is spend time worrying about your taxes. A professional tax preparer will gladly help you with this. They can handle your complicated returns for you, so you don’t need to worry about doing it yourself. 

 

At Max Tax Agency, we are glad to work with you no matter what your situation. We provide appointments in our Miami offices, but if you are busy we also are pleased to offer various accommodations. We can work with you through telephone, e-mail, and are even willing to meet you at another location. Our professionals are here to accommodate your every need.

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