Houston Tax Consultant

Houston Tax Help – Joe Mastriano, CPA Can Help You With Any Of Your IRS Tax Issues!

Many people call our office wanting someone to remove penalties and interest because they were promised by our competitors that this can happen. They should realize that the best way to look at the possibility of such a tax reduction is to consider the opinion of a knowledgeable, experienced, and good IRS CPA.

Most Common IRS Penalties:

The most common penalties are the Failure to File Penalty, Late Payment Penalty, the Penalty for Underpaying Estimated Taxes, the Substantial Understatement Penalty, and the Penalty for Negligence or Intentional Disregard.

Even if the IRS is right, sometimes penalties and interest can be abated. Typically an IRS assessment letter, or an Examination Report (from an audit), will tell you how long and how much you owe including any amount for tax penalties and interest.
Abating IRS Tax Penalties & Interest:

IRS agents are specifically instructed to carefully analyze any sound reason that you may have which could have led to your delay in filing or paying the proper tax. The Internal Revenue Manual lists seven categories of excuses for abating any tax penalty except fraud:

Death or serious illness of the taxpayer or immediate family.
Unavoidable absence.

Destruction of the business or records by fire or other casualty.

Inability to determine the tax because of reasons beyond the taxpayer’s control.
Civil disturbances.

Lack of funds, but only when the taxpayer can demonstrate the exercise of ordinary business care and prudence, and

Other reasons establishing that the taxpayer exercised ordinary business care but could not comply within the prescribed time limits.

Typically, with penalty abatement, you will be able to eliminate a good portion, if not all of the penalties, but not the interest, (known as Interest Abatement) if you can show reasonable cause. Eliminating these penalties may lift a huge financial burden off of your shoulders. Normally, penalties make up 25% of the total tax debt amount, but can be up to 90% of the total amount owed because of the large failure to file penalty and overall underpayment interest rates.