Tax Topic #2   Back to Misc. Tax Topics


THE IRS ADDED PENALTIES TO MY PREVIOUS BILL

CONSEQUENCE:

An already high tax bill grows even higher.

SOLUTION:

Ask for abatement of penalties. At anytime during the collection process, penalties are subject to cancellation on the basis of good faith, reasonable cause. Even if your tax bill is many years old and the penalties date back those several years, they are subject to cancellation when you can demonstrate facts showing your good faith. Always make every attempt to cancel penalties, especially on those bills that are aged. Cancellation has a dramatic positive impact on cutting the bill.

If you have equity in a home or other real estate and can pay the tax using that equity, canceling the penalties can be your ticket out of tax trouble. They key is to make your application for penalty cancellation prior to paying the penalties. Once the IRS cancels the penalties, use the equity in your home to pay the remaining balance of tax.

 

 
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