Late payment is one
way to incur a tax penalty, and any of the following situations may involve you
in such a dispute:
·
Understated taxable income or failure to prove a deduction
carries a penalty of 20 percent. If the value is grossly understated, the rate
doubles. Performing the aforementioned action with alleged fraudulent intent
carries a hefty penalty of 75 percent, with the possibility of charges for tax
fraud.
·
Self-employed individuals are more prone to late or
inaccurate filing and payment since they have to do everything themselves.
·
Certain circumstances prevent people from timely filing and
paying their dues (e.g. overseas duty, sickness, death, destruction of
property).
If you find
yourself in a similar situation, you need a reasonable voice to speak on your
behalf. If you need someone to prove that your shortcomings in filing or paying
your dues isn't a product of malicious intent, you need an IRS tax lawyer
capable of proving that you deserve abatement.
This isn’t known
to many, but it’s possible to request the IRS to eliminate your penalties if
you're a first-timer. Known as first-time abatement (FTA), it usually applies
to failure-to-file and failure-to-pay cases for a single tax period. However,
to qualify for FTA, you must have been faithful to your tax obligations for
three straight years.
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