IRS Penalty Abatement Attorneys
IRS penalties can double or triple a tax bill in a few years. The good news is that the IRS removes penalties more often than most taxpayers realize, but only when the request is documented properly. Valley Tax Law pursues both First-Time Abate and reasonable cause relief on behalf of California taxpayers.
There are over 150 distinct IRS penalties. The largest dollar amounts come from failure-to-file, failure-to-pay, accuracy-related, and trust fund recovery penalties. Each has its own abatement rules, and the request strategy depends on which penalty applies and why it was assessed.
First-Time Abate (FTA): The Often-Overlooked Path
First-Time Abate is an administrative waiver available to taxpayers with a clean three-year compliance history. If you have not been assessed penalties in the prior three years (other than the estimated tax penalty), are current on filing, and have either paid the tax or arranged to pay it, you can request FTA on a single tax period.
FTA is granted on the request of the taxpayer; it is not applied automatically. Many taxpayers paying installment agreements have FTA available and never use it. The penalty alone can be a five-figure savings on a single year.
Reasonable Cause Relief: Documenting the Story
Reasonable cause relief is available for any tax year and any qualifying penalty, but it requires showing that the failure was due to circumstances beyond your control despite ordinary business care and prudence. Acceptable grounds include serious illness, natural disaster, death in the family, unavoidable absence, reliance on incorrect written advice from the IRS, and reliance on a competent tax professional who made the error.
Documentation makes or breaks reasonable cause requests. Medical records, hospital discharge papers, death certificates, fire department reports, FEMA declarations, and contemporaneous correspondence with tax preparers all strengthen the case. A narrative without documentation rarely succeeds.
Statutory Exceptions and Specific Penalty Relief
Some penalties have their own statutory relief provisions. Trust fund recovery penalties under Section 6672 can be challenged on grounds of non-responsibility or lack of willfulness. Accuracy-related penalties under Section 6662 can often be eliminated by showing substantial authority for the return position or adequate disclosure on the return.
International information return penalties, including Forms 5471, 5472, 3520, and FBAR, have particularly aggressive enforcement and unique relief programs. Streamlined Filing Compliance Procedures and Delinquent International Information Return Submission Procedures both eliminate or reduce penalties in qualifying cases.
The Penalty Abatement Process
Requests can be made in writing (Form 843), through the IRS Penalty Appeal process, by telephone for simple FTA requests, or as part of a broader collection alternative like an installment agreement or OIC. The right route depends on the amount, the type of penalty, and whether collection action is pending.
If the initial request is denied, you have appeal rights. Many denied requests succeed on appeal because the Appeals Officer has authority to consider hazards of litigation that the initial reviewer does not. We routinely take penalty cases to Appeals when the first-level denial does not address the documentation properly.
Related services and service areas
This work fits within Valley Tax Law's broader California tax controversy practice. If your situation also involves other federal collection issues, see our pages on IRS installment agreements, tax penalty abatement, wage garnishment release, bank levy release, and federal tax lien withdrawal. For an overview of all federal debt-relief programs the IRS offers, see IRS debt relief programs and the Fresh Start initiative.
Geographically, we represent clients across the California Central Valley and Central Coast, including Fresno, Clovis, Visalia, Bakersfield, Stockton, Modesto, Merced, Turlock, Tulare, Tracy, Hanford, Lemoore, Sanger, Selma, Kingsburg, Reedley, Porterville, Dinuba, Lodi, Manteca, San Luis Obispo, and the surrounding communities. Tax law work happens entirely by phone and secure document portal, so location is not a barrier.
Serving California Communities
Valley Tax Law represents clients throughout the Central Valley and Central Coast. Schedule a consultation at any of our offices, or by phone.
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Tax attorney and tax lawyer representation across the Valley
Valley Tax Law represents individuals and businesses throughout the Central Valley and Central Coast. The cities below are our most active service areas. If you live in California and owe the IRS, the FTB, EDD, or CDTFA, we can help.
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