Every so often we manage to assist clients in the reduction of their IRS tax debt reduction. We use several different methods to complete the task. Today's blog post is in direct reference to a Civil Penalty assessed against a business under Internal Revenue Code Section 6671 and 6751 (d). The penalty is due to the failure to file the W-2 forms and the W-3 form with the Social Security Administration following the end of the tax year.
Our client was assessed a penalty of $115,879.00 in January of 2013. First and foremost, we immediately (within 10 calendar days) filed for an abatement request to obtain an IRS tax debt reduction and included the form W-3 and all W-2's for the 2009 tax module as attachments. It does take some time (120 days) for the IRS to take a look at the claim, however, if the IRS agrees and processes all forms with the SSA once sent in, they may waive the penalty. There are a few additional things to keep in mind when asking for IRS tax debt to be reduced:
- As with everything cross all T's and dot all i's when requesting the IRS to reduce your tax debt - meaning write down the EIN of the taxpayer, the year in question, and make sure you state why the forms were not filed or if the taxpayer did in fact file the forms. Provide proof of mailing if you can.
- Make sure all W-2's add up to the reconciliation report on the W-3 as well as match with all 941 forms.
- If all documents to not add up or match appropriately, the IRS tax debt reduction claim will not go through.
- Contact the IRS at the number on the issuing notice within 10 days to advise them you are mailing the claim for the irs tax debt to be reduced.
- Follow up appropriately and ask the IRS for timelines when asking for an IRS tax debt reduction when you call.
- Await a letter agreeing to the changes and agreeing to reduce the IRS tax debt.
The final step is to celebrate with your client! We managed to void out a $115,879 penalty and the IRS is no longer knocking at their door to collect. (See below). :) We always recommend hiring the experts at Highland Tax Group, Inc. to handle any outstanding IRS tax debt issues you may have. Feel free to call us at 720-398-6088 for a free consultation. You may also visit us on our website for more information at www.highlandtaxresolution.com.