Penalty Abatement in North Carolina
A way the IRS encourages taxpayers to be compliant is by accessing IRS penalties and interest. If you fail to file a tax return, fail to pay on time or deposit taxes by the due date the penalty for non-compliance can be quite extensive. Penalties alone can amount up to 25% with interest on top of penalties. Statistics show that after 4 years, you can expect your tax liability to double from its original amount.
However, if you exercised ordinary business care and prudence in determining your tax obligations but failed to comply with those obligations you may qualify for IRS penalty abatement. When applying, the IRS will determine if there was reasonable cause for non-compliance. If the IRS determines reasonable cause for non-compliance they waive your penalties.
- Fire, casualty, natural disaster or other disturbances
- Inability to obtain records
- Death, serious illness, or unavoidable absence of the taxpayer or member of the family.
- Received incorrect oral advice from the IRS
- First Time Penalty Abatement
The lack of funds in itself is not a reasonable cause for failure to pay on time. However, the reason for the lack of funds may meet the criteria.