Have you suffered unexpected circumstances beyond your control resulting in astronomical IRS penalties? If so, you may qualify for penalty abatement.

Case study:  Elderly gentleman lost beloved spouse in 2008 plunging into a downward spiral of depression and alcohol use. Through the help of family, friends and companionship of his parrot, taxpayer was able to recover. Tom Ryder drafted a penalty abatement request. Although the IRS Collection Division denied the request, Mr. Ryder filed an appeal and the IRS Appeals Office granted abatement of year 2008 penalties resulting in savings over $5,500.        

An elderly gentleman taxpayer had been our client in the late 1990’s and we had won a previous penalty abatement request. He happily resumed his life and we didn’t stay in much contact until 2012 when he contacted our office again. He had married a lovely woman in 2005 and they enjoyed a blissful wedded life together. She tragically passed away in December 2008 leaving the taxpayer devastated. He slipped into a cycle of depression and alcoholism for several years and stopped filing income tax returns.

Mr. Ryder coordinated with the accountant to prepare the missing income tax returns. The taxpayer had semi-retired, so there wasn’t a huge tax liability after 2008. However, late penalties and interest resulted in a balance near $25,000. Mr. Ryder negotiated an installment agreement in the amount of $500 per month, which the taxpayer faithfully paid. However, it sure would be nice to reduce some of the penalties.

Mr. Ryder drafted a penalty abatement request. Although the IRS Collection Division denied the request, Mr. Ryder filed an appeal for consideration by the IRS Appeals Office. The Appeals Office agreed to abate year 2008 penalties since his beloved spouse had passed away that year. However, the IRS denied abatement of the other years since they said he should have obtained help earlier. Luckily year 2008 was the largest penalty resulting in savings over $5,500. For a taxpayer living off social security, this savings was a huge relief and shaved nearly a year off his payment plan.