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Reasons To Waive Tax Penalties
Tax evasion has become the most staggering tax problem in the United States. The cases of fraud had been increasing day by day. Every day IRS has to issue audits to catch these tax defaulters.
But the audits do not work up to the expectations of the government, since only two percent of the total tax payers are given audits. These audits are performed by the internal revenue service agents and are really heavy penalties for the tax defaulters. But sometimes it happens that the person is not an intentional tax defaulter. May be the circumstances didn’t allow him to pay his or her tax. Under such conditions the IRS also has a feature that allows tax relief to these tax payers. But you have to put forward a genuine Reason to waive tax Penalties.
Tax evasion has many categories but the most common practice that is followed by the tax payers is that, they do not file the right amount of tax. This is called the accuracy related penalty. This penalty can be conducted on a citizen if he falls under any of the cases including carelessness or ignorance towards the tax laws, as well as a considerable understatement of income tax. Under statement is the root cause of tax evasion today and hence should not be committed.
Under statement of tax is the difference between the right amount of tax due and the amount of tax which is actually paid by the tax payer. Small amount of under statement is not that much a problem. But the problem arises when the understatement exceeds the greatest of 10 percent of the annual tax due or $10,000. Whatever the reason of the punishment, i.e., negligence, substantial understatement, or even both, you will need a strong Reason to waive tax penalties.
As explained above that the IRS can sometimes waive your penalties if you can put forward a decent Reason to waive tax Penalties. You need to be someone with no wrong motives and unintentional defaulter in the eyes of the internal revenue service agents. A taxpayer that demonstrates sensible reason and high-quality confidence for the underpayment of his or her taxes may become successful in avoiding the accuracy-related penalty which he or she would have faced otherwise.
Now the IRS has to follow a routine check up program to ensure whether the tax payer stands on his reasons to waive tax penalties. It is not an easy task to find the authenticity of the tax payer. The service takes into account the following factors before they actually get to a final decision:
- The most important fact that is taken into consideration by the internal revenue service team is the taxpayer's reason for the underpayment or non payment of tax returns that were due.
- Even if the reason is a strong one the agents are allowed to take it as the final Reason to waive tax penalties. They have to be 100% assure of the act that the tax payer is a genuine tax payer. For that they have to check his or her past records of tax payment. If these records prove that he or she has been paying tax at time the chances of getting a tax relief increases many folds. Thus the taxpayer's history of tax payments is an important mean to judge the authenticity.
- Another important fact is the period of time between the underpayment and subsequent correct payment of tax. This is to be counted since it shows that tax payer is not cheating with the government, but is paying the tax whenever he or she feels confident in financial areas.
- Last but not the least the agents have to check whether conditions that lead to underpayment of taxes are beyond the taxpayer's control or are within his or her reach. After going through all these steps the agents will get a firm report about the tax payer and can provide the final verdict to provide him or her with tax relief.
Under the system, the taxpayer must, at a least amount, reveal all relevant facts to the adviser which lead to the under payment of tax. The internal revenue service agents are well trained professionals who go through the opinion on the relevant facts and law and do not rely on difficult realistic or lawful assumptions or may be even taxpayer false representations. Thus it is clear that the tax payer will be guaranteed a tax relief only if he or she has the well defined Reason to waive tax penalties.
Thus it may be clear that IRS do provide tax help and tax relief to those who need it. They will make sure that only the deserving candidates get the tax relief. This is the reason why the internal revenue service has been marked as the best tax organization in the world.