Although not widely publicized, taxpayers should know that they may be eligible for a one-time penalty amnesty (first time penalty abatement or FTA) – which can translate to a potential savings of hundreds or even thousands of dollars.
There are three penalty scenarios under which an individual or business may request an FTA: failure to file, failure to pay, or failure to deposit. Further, there are other qualifying considerations the taxpayer must meet. Namely, any other assessed penalties of a “significant amount” on the same type of return within the last three years would not qualify. Also, there are certain types of returns/penalties that cannot be waived (ex. estate and gift tax returns and estimated tax penalties).
How do you know if you qualify and what steps should you take? To determine your eligibility, it is best to consult with a CPA. While the IRS does have personnel to determine taxpayer eligibility, a CPA can advocate on your behalf and may be able to yield a more favorable outcome.
For more information, please call the office of Ronald Castor LC at 913.469.9113.