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Seeking tax penalty relief through reasonable cause

| Mar 18, 2019 | Federal And State Tax Collections |

For some individuals in New York and elsewhere, tax time is just another day. For others, it is a dreaded times, as they are finding it difficult to pay the taxes they owe. When it becomes problematic and taxes are not paid, an individual could face penalties. Additionally, the collection process could initiate.

Because there are many reasons for why a person s unable to pay in full, on time or at all, the IRS will consider some of these reasons. If a valid reason does exist, it may be possible to resolve the issue. In fact, it may be possible to avoid the penalties associated with this situation.

One way to obtain penalty relief is reasonable cause. This means that the facts and circumstances surrounding the situation will be assessed. Essentially, the reason must indicate that one used all ordinary care and prudence to make payment on federal taxes; however, despite these efforts, he or she was unable to do so.

While these matters are considered on a case by cases basis, there are more common reasons than others to seek penalty relief for reasonable cause. This includes a fire, casualty, natural disaster or other type of disturbance, the inability to obtain necessary records, death, serious illness, incapacitation or unavoidable absence or any other reason that establishes that one used all ordinary car and prudence to meet tax obligations.

For those seeking penalty relief or are dealing with federal tax collection issues, it is important to fully understand your situation. By looking at the facts of your circumstances, it may be possible to alleviate some or all of your tax problems.