Tax Topic #5   Back to Misc. Tax Topics


THE IRS UNFAIRLY ADDED INTEREST TO MY TAX BILL

CONSEQUENCE:

With interest compounded daily, the tax debt is pushed higher each day.

SOLUTION:

Ask for cancellation of the interest. The IRS flatly denies that interest is subject to cancellation, but the law provides three clear situations in which it may be canceled. The first is where the interest is attributable to IRS delay that occurs while processing the case. The second is where the interest is attributable to an IRS error. And the third is where the interest is attributable to an erroneous refund issued by the IRS but which you in no way caused.

Request cancellation of interest much the same way you do penalties. Write a letter to the service center handling your account. Address your letter to the Interest Abatement Coordinator. Provide detailed facts to allow the reader to conclude that the interest is attributable to one of the three areas mentioned above. Document your claims every way possible. Be specific, not vague. Argue that you are entitled to have all or part of the interest canceled.

 

 
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