If you make an effort to comply with the law, but are unable to meet your tax obligations due to circumstances beyond your control, you may qualify for relief from penalties.
If you receive a notice stating that a penalty was assessed, you first should check that the information in the notice is correct. If you can resolve an issue in your notice, you may get relief from certain penalties, which include failing to:
- File a tax return
- Pay on time
- Deposit certain taxes as required
The following types of penalty relief are offered:
This relief is based on all the facts and circumstances in your situation. This relief will be considered when you can show you tried to meet your obligations, but were unable to do so. Situations when this could happen include a house fire, natural disaster and a death in the immediate family.
Administrative Waiver and First Time Penalty Abatement
You may qualify for relief from certain penalties if you:
- Didn’t previously have to file a return or had no penalties for the three tax years prior to the tax year in which the penalty was assessed.
- Filed all currently required returns or filed an extension of time to file.
- Paid, or arranged to pay, any tax due.
In certain situations, legislation may provide an exception to a penalty.
For more information, always consult a Certified Public Accountant. Submitted by: Brian Walgamott, Senior Manager, Tax Services, Thomas Howell Ferguson P.A. CPAs. To ask Brian a question, contact him here.