true
Top
  1. TurboTax /
  2. Tax Calculators & Tips /
  3. Tax Tips Guides & Videos /
  4. Tax Payments /
  5. Video: IRS Penalties for Abatement

Video: IRS Penalties for Abatement

Updated for Tax Year 2022 • November 17, 2022 02:22 PM


OVERVIEW

When the IRS waives a penalty it is called abatement. Learn about IRS penalties for abatement with help from TurboTax in this tax tip video.


TABLE OF CONTENTS

Video transcript:test

Hello, I'm Sara from TurboTax with some important information on getting your tax penalties waived. Not paying your taxes on time without IRS consent, may have pretty severe consequences. Not only do you have to pay interest on the amount you owe until it's paid off, but you may be responsible for penalties which can tack on another 25 percent to what you already owe.

However, the IRS is permitted to reduce or completely waive these penalties if you prove to them that you had a reasonable cause. Reasonable cause is a pretty high standard that usually requires extenuating circumstances.

For example, losing all your financial documents in a fire or other disaster or suffering from a severe illness may get your penalties waived. But remember if you claim that your reason was due to an illness, the IRS may require a lot of proof to be convinced and generally telling the IRS that you are on vacation on the tax deadline or that you didn't realize the deadline was approaching will not get you very far.

If you are unable to get the penalties waived and cannot afford to pay in full it may benefit you to enter into an installment agreement to make manageable monthly payments. You can also try to reduce the actual amount of tax you owe by making an offer in compromise. If you go this route, be prepared to convince the IRS that you will suffer an economic hardship without the compromise.

young couple speaking with mature man

Let an expert do your taxes for you, start to finish with TurboTax Live Full Service. Or you can get your taxes done right, with experts by your side with TurboTax Live Assisted. File your own taxes with confidence using TurboTax. Just answer simple questions, and we’ll guide you through filing your taxes with confidence. Whichever way you choose, get your maximum refund guaranteed.

All you need to know is yourself

Answer simple questions about your life and TurboTax Free Edition will take care of the rest.

For simple tax returns only
See if you qualify

Real tax experts on demand with TurboTax Live Basic

Get unlimited advice and an expert final review. Done right, guaranteed.

For simple tax returns only

Looking for more information?