They may. If this is the first time and there hasn’t been trouble
before, there’s a good chance you can get some of the penalties
removed. Also, they might waive some or all of the penalty if there’s
a “reasonable cause.” For example, perhaps your mother or
your daughter or your wife was very sick and you had to take care of her
and didn’t have time to get your records in order to get your tax
return prepared. Or perhaps you’re a small business person, and
you have a flood that destroys your business records. Those are examples
of reasonable cause.
Congress does not give the IRS as much flexibility to reduce or eliminate
the interest you owe. IRS interest is like the interest on your credit
card balance. The higher your balance, the more interest you’re
going to pay. If you pay your taxes late, there’s interest on that.
Then, if there is a penalty on your late taxes, you’ll also pay
interest on that penalty. If the IRS eliminates or reduces the penalty,
that portion of your interest will be eliminated. If any penalty remains,
you’re still going to be charged interest on the penalty. Plus,
you’re still going to be charged interest on the tax you owe.
The IRS can’t do anything that congress doesn’t explicitly
authorize them to do. The only reason the IRS can reduce penalties for
“reasonable cause” is because congress gave them specific
authority to do so.
For more information on
Waiver of Penalties for Non-Payment of Taxes, a free initial consultation is your next best step. Get the information
and legal answers you need by calling
(510) 444-4430 today.