IRS Deductions: Keep IRS Penalty issues from Skyrocketing: IRS Facts You Need to Know
IRS Tax Penalty & IRS Tax Deductions: IRS Tax Penalty laws were designed to make things fair. After all, how fair is it to those who pay their taxes on time if the late filers don't get punished? But unfortunately for you, IRS Tax Penalty problems have mutated into being a way for the IRS to Extort Big Profits out of taxpayers! IRS Tax Penalty and Interest not only routinely Doubles but also Triples a Tax Bill.
Know The IRS Facts: The IRS is successful at collecting penalty fees because so few people know they have the right to cancel the fees! The IRS addresses Penalty Cancellation in Publication 1 "Your Rights as a Taxpayer":
- "The IRS will waive penalties when allowed by law if you can show you acted reasonably and in good faith or relied on the incorrect advice of an IRS employee."
"Good Faith" for IRS Deductions 101: You act in good faith when your actions were not intended to break the law. Even if they were wrong. This can include ignorance of the law, bad advice from the IRS, bad advice from a Certified Tax Professional (like an attorney), or proof that you just innocently made a mistake.
"Reasonable Cause" for IRS Deductions 101: Reasonable Cause is a good reason for failing to act on your Tax Debt. It is very important to notify the IRS of your Reasonable Cause A.S.A.P. Some common examples of Reasonable Cause are:
-IRS Facts: Serious Medical Problems (Prolonged injury or illness)
-IRS Facts: Natural Disasters requiring you to move (Wildfire, Flood, etc.)
-IRS Facts: Financial Problems due to sudden unemployment
-IRS Facts: Drug/Alcohol Addiction
-IRS Facts: Loss of financial records NOT due to negligence (Ex:. Your house burned down and took the file cabinet with it)
-IRS Facts: Use Your Common Sense: This is the IRS you're dealing with. Excuses like, "My Dog ate my Tax Records!" are not going to cut it.
Tax Deductions- Prove it! Now you know that if you prove you had Good Faith and Reasonable Cause you can prevent penalties from accruing on your debt. The challenge is proving both without a shadow of a doubt. It won't be easy- The IRS wants very specific information from you. It would be a big help to hire a Tax Professional who knows all the loop holes to aid you in your battle.
