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Complex IRS Penalty Abatement Procedures for Failure-to-File, Failure-to-Pay, and Accuracy-Related Penalties

Mastering Procedural and Practical Ways to Obtain Penalty Abatement; Mitigating Harsh IRS Penalties

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, November 3, 2022

Recorded event now available

or call 1-800-926-7926

This course will provide tax professionals with a comprehensive and practical guide to navigating the procedural and efficient ways to obtain a penalty abatement. The panel will cover domestic and foreign information abatement requests and offer valuable tools for compiling and submitting the appeal correspondence and documentation.

Description

The IRS assesses many types of penalties against taxpayers: late-filing penalties, late-payment penalties, estimated tax penalties (Secs. 6654 and 6655), accuracy-related penalties, and so on. Tax practitioners face these tax penalties almost daily, and this webinar will provide procedural and practical ways to obtain a penalty abatement.

The IRS employs strict standards for determining whether a taxpayer qualifies for a reduction in penalties for failure to file required tax returns. TIGTA issued a report indicating that IRS controls over penalties were deficient, leading to incorrect abatement in many tested cases. As a result, the IRS increased scrutiny over penalty abatement requests.

The Service has several appeal tracks for denial of abatement requests. Understanding the required documentation, which depends on the type of appeal and the basis for the taxpayer's claim, is critical to navigating the appeals process. Abatement appeals require significant substantiation, which can often be challenging to obtain.

Listen as our experienced panel of advisers provides a thorough guide to navigating procedural and practical ways to obtain a penalty abatement.

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Outline

  1. Failure-to-file and failure-to-pay penalties (Sec. 6651)
    1. Know how and when to attach a penalty non-assertion request to a late-filed return
    2. Establish an installment agreement
  2. Estimated tax penalty (Sec. 6655)
  3. Accuracy-related penalty (Sec. 6662)
    1. Determining specific tax authority standards (e.g., the "more likely than not" standard or "substantial authority" standard)
    2. Fully substantiating a client's reasonable cause defense
  4. Best use of the Independent Office of Appeals
  5. Exploiting the IRS' failure to follow 6751(b)--the Graev defense
  6. Using CDP hearings to abate penalties
  7. Foreign informational return penalties (for example, Forms 5471, 5472, 3520, and 3520-A)
    1. Avoiding automatic assessments through the streamlined process
    2. Reasonable cause standard for foreign information reporting forms
    3. Litigation overview

Benefits

The panel will discuss these and other relevant topics:

  • Penalty abatement qualifying requirements
  • Penalty non-assertion request to a late-filed return
  • Using very subjective reasonable cause criteria
  • Utilizing the Independent Office of Appeals
  • Methods of calculating penalties
  • Qualifying for the first-time abatement program

Faculty

Drabkin, Igor
Igor S. Drabkin
Tax Attorney & Principal
Holtz, Slavett & Drabkin

Mr. Drabkin represents tax clients in disputes with the IRS and state revenue authorities, both administratively...  |  Read More

Warner, David
David J. Warner
Tax Attorney, Shareholder & Managing Principal
Holtz, Slavett & Drabkin

Mr. Warner is a Tax Attorney and the Managing Attorney of the Orange County Office of Holtz, Slavett &...  |  Read More

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