How to Remove IRS Penalties
Every year some taxpayers face challenges to pay additional taxes to the IRS. In this tough economy, it may be difficult to pay additional money to the IRS. Like most bills, the IRS does not wait for their money. If the money is not paid within a period of time, taxes owed will begin to draw interest and penalties. This makes it even more difficult to pay the tax debt. However, you may be able to settle the tax debt where you can remove the penalities that has been added to your tax debt.
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Instructions
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How to Get an Offer in Compromise
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Obtain a Offer in Compromise. You can contact the IRS and ask them for a settlement on your outstanding tax debt. If they are willing to settle the debt, you will need to fill out an Offer in Compromise. The IRS may provide you with this offer by mail, fax, or e-mail.
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Download the Offer in Compromise from the IRS website at www.irs.gov. Click on Forms and Publications on the lefthand side of the website. Then, click on Form and Instruction number. In the Find field, search for form 656 (Forms and Publications). This is the Offer in Compromise. The search results should also include other documents such as an instruction booklet, which is Form 656-B.
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Submit the Offer in Compromise. You will have to mail the offer to the IRS because you will likely have to pay the $150 application fee. You may be exempt from paying the application fee if you deny that the lien belongs to you or if you are not a taxpayer, meaning the lien belongs to a business or corporation.
Tax Abatement
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Visit the IRS website at www.irs.gov and request a tax abatement. Beacause penalties make it even more difficult to pay taxes owed to the government, you can request a penalty tax abatement. To obtain a penalty tax abatement, you will need to complete Form 843.
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Download Form 843. Click on Forms and Publications on the lefthand side of the website. Click on Forms and Instruction Numbers. Search for Form 843. You will need to print the form out, complete it, and return it to the IRS.
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Contact a tax professional. If you do not want to handle the tax abatement yourself, you should consider contacting a tax professional, such as your tax preparer. If you will be using the assistance of a tax professional, you will need to complete Form 2848, which you can find by searching for specific forms on the IRS website. This form allows the tax professional to act on your behalf in reducing the penalties of the debt. The tax professional who assists you may have the form handy.
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