Can I appeal a denied IRS penalty abatement request?

Can I appeal a denied IRS penalty abatement request?

Introduction:

You may be wondering what to do if you received a penalty from the IRS and your request for a penalty abatement was turned down. You can appeal a denied IRS penalty abatement request, which is good news. We will go over the appeals procedure, the reasons why a request may be turned down, and how to improve your chances of getting penalty relief in this extensive guide.

The IRS provides a type of relief known as penalty abatement, which enables taxpayers to have specified fines eliminated or decreased in certain situations. The following are the most frequent fines that qualify for abatement:

Penalties for failure to file

Penalties for nonpayment

Penalties for non-deposit (for enterprises)

Typical IRS Penalty Abatement Types

For taxpayers with a spotless compliance record, the First Time Penalty Abatement (FTA) is a one-time relief.
Reasonable Cause Abatement: This type of relief is given to taxpayers who can demonstrate that they had a valid excuse for not filing their taxes, such as a natural calamity or illness.
Statutory Exception Abatement: If an IRS error or inaccurate written guidance resulted in the imposition of a penalty.

Why Was Your Request for an IRS Penalty Abatement Rejected?
For a number of reasons, the IRS may reject requests for penalty abatement, including:
First-time abatement is not available if the penalties were imposed during the previous three years.

Absence of justification (inadequate justification or documentation).

noncompliance with IRS payment and filing requirements.

According to IRS regulations, the penalty is not eligible for abatement.

inadequate evidence that the penalty resulted from an IRS error.

Don't panic if your request for a penalty abatement was turned down; you can appeal the ruling.

How to File an Appeal for an IRS Penalty Abatement Request That Was Denied
Examine your letter of denial.
The IRS will send a refusal letter outlining the grounds for the decision if your request for a penalty abatement is denied. Additionally, details on how to appeal the decision will be included in this letter.
Examine the IRS Code or Reason Given: You might learn more about the reasons your request was denied by looking at the IRS penalty code that is frequently included in the denial letter.
Find Out If There Was a Mistake: In certain cases, the IRS may reject a request because of incomplete information or improper application of the tax code.
Get Your Request for Appeal Ready
You can appeal to the IRS Office of Appeals if you think the denial was unjust or inaccurate.

Create a Protest in Writing: Included in your letter of protest should be:
Your name, address, and Employer Identification Number (EIN) or Social Security Number (SSN).

A copy of the letter of refusal.

a thorough justification for your opinion that the IRS was mistaken.

Extra supporting documentation to bolster your argument.

Use IRS Form 843: To formally request a review of the penalty, you may also submit IRS Form 843 (Claim for Refund and Request for Abatement), if applicable.
File an Appeal
Send Form 843 or your written protest to the IRS office that made the denial. Usually, the denial letter contains the proper address.
You can file a Small Case Request, which is a streamlined appeal procedure, if the penalty is $25,000 or less.

Go to the Hearing on Appeals
The IRS Office of Appeals will set up a hearing, which can be held in person, by mail, or over the phone, if your appeal is granted.

Prepare to use convincing and unambiguous evidence to support your position.

You have the option of representing yourself or hiring a tax expert, certified public accountant, or tax lawyer to act as your advocate.

What Takes Place Following the Appeal?
Following the appeals officer's consideration of your case, the following outcomes could occur:
If the appeal is granted, the fine is waived and you are not required to pay it any more.
Partial Relief: Rather than completely removing the penalty, the IRS may lower it.
Appeal Denial: Should your appeal be rejected, you might be able to pursue additional options.

Tax Resolution Services At CPA Clinics:

CPA CLINICS’ Tax Resolution Services Team is here to address the government and state notices and debt for you. The Internal Revenue Service (IRS) has three main divisions related to audit, appeal, and collection activities. Revenue Officer (RO) is within the collection division, and a notice or contact from them could be a very serious matter as they have the authority to seize assets, levy income, and take bank accounts.

Conclusion:
You may be able to avoid needless financial obligations by appealing a denied IRS penalty abatement request. Knowing why your request was rejected, obtaining solid proof, and adhering to the correct appeal procedures are essential for a successful appeal. If your appeal is denied, think about speaking with a tax expert to learn more about your choices, including IRS payment plans and an Offer in Compromise (OIC).
You can increase your chances of receiving financial relief and lowering or eliminating IRS fines by completing the appropriate actions.