An IRS penalty waiver does exactly what it sounds like – waives IRS penalties. For an individual filer, this procedure attacks failure-to-file or failure-to-pay penalties. For a business, these penalties also include those related to a failure to properly deposit payroll taxes. Pursuing this type of waiver is one step in the process of reducing or eliminating tax debt.

Who Can Qualify?

To qualify, you should meet these criteria:

• You must be up-to-date on all tax filings or have filed a current tax extension.
• You have not faced a large penalty from the IRS in the last three years (a small penalty may not exclude you).
• You have paid or are in the process of paying any taxes.
• You have “Reasonable Cause” for not paying or filing late. With all things related to the IRS, exceptions can be made. Not sure if you qualify? Speaking with a tax resolution professional can help shed some light on the process.

What is “Reasonable Cause”?

Usually, when filing an IRS penalty waiver, you’ll want to have a good reason for your failure to file, deposit or pay. There are many reasonable explanations for this type of delinquency. For example, a slump in business could make depositing payroll taxes impossible, or a health issue could leave you unable to file or pay on time.

A trusted tax resolution service can help with the necessary paperwork and the success of the application process (and any necessary appeals).

How Else Does an IRS Penalty Waiver Help?

As discussed, a penalty abatement absolves administrative penalties incurred by qualifying taxpayers. But did you know that it can reduce or remove any interest charged on an IRS penalty? That can mean big savings toward your tax debt. And keep in mind, even if you don’t qualify for this type of waiver, contact Direct Tax Relief as there may be other IRS tax debt resolution options available to you. Learn why our A+ rating with the Better Business Bureau matters.

IRS Penalty Waiver: https://www.irs.gov/irm/part20/irm_20-001-001r#d0e2854

The post First-Time Tax Offender? See if You Can Benefit From an IRS Penalty Waiver appeared first on Direct Tax Relief.

1. Restrictions on Travel

Luckily for Iggy, she’s got an Australian passport. For U.S. citizens owing over $50,000, traveling may not come so easily. With the new IRS passport law, individuals with this sizeable debt (and that includes fees and penalties) will now find themselves unable to travel using their passports. And this won’t just affect international visits. Thanks to non-compliance with the controversial Real ID Act, citizens living in Minnesota, New Hampshire, New York, and Louisiana may soon be unable to travel domestically without an approved passport.

2. A Tax Lien

One of the biggest tax debt penalties concerns tax liens. A standard tax lien lasts for 10 years and can be extended if the IRS chooses. Tax liens will lower credit scores and prevent real estate closings. They are also on public record, so they can possibly threaten employment opportunities and be a general embarrassment to your reputation. Iggy’s fame may make it easier to deal with the credit, employment, and real estate side of the equation, but, if you follow the celeb on Twitter, the embarrassment of such a giant lien is still pretty evident.

3. Lots of Fees

Iggy is currently paying her debt in installments. If she ends up failing to pay, she may face another one of the big tax debt penalties: giant fees. In fact, if Iggy fails to pay, she could end up owing thousands of dollars a month in late payment fees. It might temporarily feel less stressful to ignore your tax debt, but just as with so many things in life, the problem will simply compound.

So how does someone like Iggy Azalea end up owing $400,000 to the IRS?

While she may be high-profile (and highly paid), Iggy’s story is similar to many people in the U.S. who find themselves in debt to the IRS. Like any self-employed individual, she may not have known exactly when her next check would come or how much she would end up owing, so she didn’t hold anything back. It could also be that Iggy didn’t have the necessary financial counsel to advise her on what to spend, what to save, and what she’d owe. One thing is for sure, her mistakes are something any of us could make.

Have you found yourself overwhelmed by tax debt? Are you living in fear of these tax debt penalties? Don’t bury your head in the sand. Instead, contact Direct Tax Relief for IRS tax resolution services at 1-877-505-4829.

Sources:

• https://www.nydailynews.com/entertainment/gossip/iggy-azalea-hit-hefty-tax-lien-article-1.2587669
• https://www.forbes.com/sites/robertwood/2016/04/05/iggy-azaleas-400000-irs-tax-lien-dims-10-carat-ring-but-irs-cant-revoke-her-passport/?sh=66df32a32c57

The post Iggy Azalea Owes $400,000 to the IRS. See 3 Possible Tax Debt Penalties She Could Be Facing appeared first on Direct Tax Relief.