Everyone understands that the Internal Revenue Service plays for keeps. If you fail to file tax returns, you will not only owe those back taxes, but you can also be assessed interest and penalties. For those who owe significant amounts, a failure to file can result in significant penalties.
In certain circumstances, however, you can file for and receive relief from IRS tax penalties.
On its website, the agency says you might qualify for sweet relief from its penalties if you A.) made an effort to comply with the law, and B.) you were unable to comply due to events beyond your control.
You can be eligible for relief from penalties in the following situations:
- Failure to file a federal tax return
- Failure to pay taxes owed on time
- Failure to deposit taxes as required
So what will the IRS accept as an excuse for failing to file? One of the acceptable excuses is known as “reasonable cause.” There is no list of reasonable causes for you to check, but the IRS says some typical reasonable causes include serious illness (this can apply to you or a member of your immediate family), death (a member of your immediate family), fire, natural disaster and an inability to obtain records.
It should be noted that you and your tax attorney will have to prove with documentation to the IRS that one of these reasonable causes occurred so that you might obtain relief from penalties.