Tax Resolution

Question 1

What is considered reasonable cause that will allow abatement of a tax penalty?

Answer 1

Reasonable Cause is based on all the facts and circumstances in your situation. We will consider any reason which establishes that you used all ordinary business care and prudence to meet your Federal tax obligations but were nevertheless unable to do so. The IRS will consider any sound reason for failing to file a tax return, make a deposit, or pay tax when due. Sound reasons, if established, include:
* Fire, casualty, natural disasters, * Inability to obtain records * Death, serious illness, incapacitation or unavoidable absence of the taxpayer or a member of the taxpayer’s immediate family * Other reasons that establishes that you used all ordinary business care and prudence to meet your federal tax obligations but were nevertheless unable to do so.
Note: A lack of funds, in and of itself, is not reasonable cause for failure to file or pay on time. However if the reasons for the lack of funds may meet reasonable cause

Source:
https://www.irs.gov/businesses/small-businesses-self-employed/penalty-relief-due-to-reasonable-cause#:~:text=Most%20reasonable%20cause%20explanations%20require,other%20events%20that%20prevented%20compliance

Question 2

What are some of the facts the IRS may need in order to determine Reasonable Cause?

Answer 2

Facts we need in order to determine Reasonable Cause:

What happened and when did it happen?
What facts and circumstances prevented you from filing your return or paying your tax during the period of time you did not file and/or pay your taxes timely?
How did the facts and circumstances affect your ability to file and/or pay your taxes or perform your other day-to-day responsibilities?
Once the facts and circumstances changed, what actions did you take to file and/or pay your taxes?
In the case of a Corporation, Estate or Trust, did the affected person or a member of that individual’s immediate family have sole authority to execute the return or make the deposit or payment?

Source https://www.irs.gov/businesses/small-businesses-self-employed/penalty-relief-due-to-reasonable-cause#:~:text=Most%20reasonable%20cause%20explanations%20require,other%20events%20that%20prevented%20compliance

Question 3

What are some of the documents you may need to support your claim for reasonable cause?

Answer 3

Most reasonable cause explanations require that you provide documentation to support your claim, such as:

Hospital or court records or a letter from a physician to establish illness or incapacitation, with specific start and end dates
Documentation of natural disasters or other events that prevented compliance

Source:
https://www.irs.gov/businesses/small-businesses-self-employed/penalty-relief-due-to-reasonable-cause#:~:text=Most%20reasonable%20cause%20explanations%20require,other%20events%20that%20prevented%20compliance

Question 4

Can you submit forms 2848 electronically?

Answer 4

You can safely upload and submit your client’s third-party authorization forms. The steps are as follows:

1. Log in with your username, password, and multi-factor authentication.
2. Answer a few questions about the form that will be submitted. You can only submit one form at a time.
3. Upload a completed version of a signed Form 8821 or Form 2848.
4. To submit multiple forms, select “submit another form” and answer the questions about the authorization.

Question 5

How do you submit a 2848 by fax?

Answer 5

Yes the fax number for taxpayers living in Louisiana is 1-855-214-7519

Source:
https://www.irs.gov/instructions/i2848#f11981u01

Question 6

How do you find the correct interest rate to calculate the interest due on income tax

IRS Topic No 653

Answer 6

Generally, interest accrues on any unpaid tax from the due date of the return until the date of payment in full. The interest rate is determined quarterly and is the federal short-term rate plus 3 percent. Interest compounds daily. Visit Newsroom Search for the current quarterly interest rate on underpayments.