Statutory exceptions are a type of IRS penalty relief granted in specific circumstances. These situations can involve disasters or other situations that affect a certain group of taxpayers.
In some cases, the statutory relief will be automatic—you won’t have to apply for penalty abatement. In other situations, you made need to request penalty abatement and provide evidence to back up your claim.
Erroneous IRS Advice
Taxpayers sometimes request written advice from the IRS about a certain tax item. When the IRS gives incorrect advice and it results in a penalty, the taxpayer can request penalty abatement due to a statutory exception.
You’ll need to use Form 843 and submit the written request for advice and the erroneous advice you received from the IRS. Talk to a tax attorney if you need help requesting this type of relief.
Safe harbors are a form of statutory exception. For example, underpayment penalties generally apply if you fail to pay your full tax liability throughout the year in either estimated tax payments or taxes withheld by your employer.
One of the available safe harbors provides that you won’t owe any underpayment penalties if you owe less than $1,000 in total tax for the year. You’re also protected from underpayment penalties if you had no tax liability the previous year or weren’t required to file a tax return, as long as you were a U.S. Citizen or resident alien during the prior year.
The IRS often provides penalty relief to those who are affected by natural disasters. For example, the IRS extended both the tax filing and tax payment deadlines for taxpayers affected by Hurricane Micheal in 2018.
Taxpayers who had filed for a six-month filing extension normally would have been required to file by October 15th, by the IRS extended the deadline to February 28, 2019. An extension was also given to make quarterly estimated tax payments and file payroll and excise tax returns. Taxpayers who lived in a Major Disaster Declaration area designated by FEMA automatically get this relief.
You may be eligible for penalty relief if you were affected by a natural disaster or other circumstances out of your control. Contact a tax attorney to see if you qualify for any type of IRS penalty relief.
Contact The Gartzman Law Firm to speak with an Atlanta tax penalty relief attorney about your case. Request your consultation by calling (770) 939-7710.