The IRS imposes penalties on taxpayers in many types of situations; for instance, non-payment or late payment of taxes, late filing of returns, providing late information and many more. The taxpayers have the right to go against the penalty imposed and get it reduced. The process of reducing or eliminating IRS tax penalties is called as penalty abatement.
In order to accomplish penalty abatement from the IRS, a reasonable cause is required.A reasonable cause is a reason because of which you were not able to fulfill the essential things involved in your tax return. If this cause is accepted by the IRS as a reason, then the penalties that are charged towards you can be reverted. In this case, the taxpayer has to pay ether some of the penalty amount or it is waived off completely depending upon the intensity of the matter.
There is a systematic process to apply for penalty abatement. A letter has to be sent to the IRS requesting that the penalties are abated. You have to include the reasonable cause in your request. The IRS considers your request and checks for the genuineness of it. If found suitable, the tax penalties levied upon you are reduced or exempted. The decision about reducing or exempting totally depends on the IRS and is taken on the basis of many factors including the amount of tax debt and the previous history. If you have a good history in filing of taxes which means that if you have filed your returns and made the tax payments well within the due date in the previous years, there is very good chance that your penalties are consolidated. The penalty abatement process is indeed very beneficial for taxpayers and a better option as compared to compromise offers and installment agreements.