Every year IRS sends letters to thousands of taxpayers and asks to pay for the penalties. Reasons vary from one person to person as there are numerous of tax penalties exist. One of the most common things that allow IRS to put penalties on your account is errors you make while preparing your taxes. Some of the most common errors are claiming deductions for overstatement expenses, underpayment of the expected tax amount and trying to underreport the income on your tax return. You might find yourself paying tax penalties and reason could be anything. In this case, first of all IRS will send a letter to you informing that you are liable to pay X amount of money as penalty in addition to Y amount that you owe to the tax authority. If you don’t know much about taxes, you should look out for qualified IRS tax attorney who has good amount of experience in dealing with such kind of cases.
Dealing with IRS tax penalties is not easy at all. No one wants to pay more than what they actually owe. However, there are tax payers who end up paying remaining amount from their taxes including high penalties. If you don’t want to be among them experts always suggest you to file your taxes in time. In case, you fail to file your taxes in time, IRS is authorized to penalize your account with five percent per month. If you think, the penalty is increasing on papers only, after few months you will find that IRS has sent you a bill with penalty of over 25 percent and in this situation you are bound to pay otherwise, your property and other assets will get seize and they have right to garnish your wages. It will not only put you under financial crisis but also would let your colleagues know that you are facing financial hardship.
It’s not always possible that you are ready with your financial records to file your tax return. But it doesn’t mean that you should end up paying penalties. There is an alternative to deal with this issue. You can file for tax extension. To get tax extension, you need to fill Form 4858. You can easily get extension of two to six months to file taxes. The best part is that there will be no late fee charges on this extension. You can also go for penalty abatement. In this scenario, you can appeal against the penalties levied by the IRS. However, you should have string reasons for not paying taxes in time. Some of the most common reasons that are considered as genuine reasons are death in family, facing issue of unemployment, going through divorce or trying to overcome from natural disaster. IRS tax attorney will be there with you all time whenever you are in meeting with the IRS. He knows ins and outs of the work ethics of the IRS therefore; he would have the knowledge of loop holes and win case for you.