Residents and businesses in Providence, Cranston and throughout Rhode Island can fight back if they have been improperly penalized by the Internal Revenue Service for delinquent taxes. The abatement process is the most common means of challenging penalties and interest that the IRS has imposed for nonpayment or underpayment of taxes.

The process begins by submitting a Claim for Refund and Request for Abatement (Form 843). The IRS gets to play by its own rules, but it 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. The determination of whether a taxpayer acted with reasonable cause and in good faith is made on case-by-case basis, taking into account all pertinent facts and circumstances.

The IRS has been known to abate penalties if tax debt resulted from:

  • Death or serious illness of the taxpayer or immediate family
  • Destruction of records due to fire or other casualty
  • Family problems such as divorce or a death in the family
  • Improper advice from a tax professional
  • Erroneous written advice from the IRS
  • Inability to determine the tax due to reasons beyond the taxpayer’s control

Reasons why the penalty should be abated should be noted on your form. Any copies of documentation that supports the reasons for the abatement should be attached.

If your abatement request is denied, you have the right to request an appeal. If an appeal officer also denies the abatement request, the next step is usually to pay the penalty and the tax deficiency and file a claim for a refund.

The IRS is more reluctant to reduce interest, usually doing so only if the IRS made an error or somehow delayed your tax case, causing interest to accrue.

At the firm of Cranston tax lawyer Michael T Napolitano, we assist individuals and businesses with all tax disputes, including requests for abatement of penalties and interest. Some abatement requests have strict time limitations, so it is important to file an abatement request as soon as you discover the existence of an inappropriate penalty.

Mr. Napolitano has been a practicing attorney since 1981. He has helped thousands of clients manage and reduce penalties and delinquent tax bills through abatement, offers in compromise, installment agreements and more. We are committed to achieving the best results for our clients as efficiently as possible.

Call 401-464-9516 or email us to review the facts of your case and recommend the best course of action.