Tax Attorney Darrin Mish discusses tax penalties and abatement on back taxes.

“Its not the tax. Its the penalties and interest that gets you.”

The harsh truth is that interest will not be reversed except in the most rare cases. Unless you can get the penalties abated, you will not be able to get the interest abated as well.

Abatement is the elimination or reduction of penalties. The reduction of penalties as defined in tax law is severely limited. However, taxpayers would most likely achieve greater success where the tax penalties are abated in those cases where taxpayers can establish “reasonable cause”, or a “darn good reason”.

Examples of good reasons would include divorce, drug addiction, alcoholism, natural disasters, death, serious illness, etc. These are examples of reasons that are unavoidable and not reasonably foreseeable.

Chances of penalty abatement are greater where taxpayers do not have a prior history of tax problems.

To get relief, you will need to request relief in writing, either by completing the appropriate tax form or by letter. Many of the penalty relief letters are ignored where the request is not clearly documented or lacks specificity.

In some cases the penalty relief requests are denied. You will receive a letter stating why the tax abatement was denied with instructions of how to appeal the penalty abatement request if you disagree.