Will the IRS Waive Interest and Penalties?

Will the IRS Waive Interest and Penalties? So the question we get asked a lot is will have a taxpayer who owes fifty thousand hundred thousand million dollars in liability and the taxpayer our client doesn't object to the actual tax liability well some do but most of them object to the interest and penalties that get tacked on to their liability which can add tens or hundreds of thousands or even even more than a million dollars to. The liability so with interest interest on tax liabilities is defined and set by a statutory rate so absent some really critical error with the IRS or the way that they calculate the liability which is not to say the IRS doesn't make mistakes they do but absent some sort of serious error you're probably not going to get the interest way one of the revenue officers that I work with frequently says the interest is what the interest is and that's true and the flip side of that is the federal interest rate for tax liabilities is generally speaking pretty low now the penalty portion of the liability usually is pretty Steff however penalties can get waived under served circumcircle stances what you need to waive a penalty is something called reasonable cause the reasonable cause is essentially a good-faith excuse for why the tax that was incurred and we can spend a lot of time talking about reasonable cause but if you believe that you have reasonable clauses and there's a genuine reason on why this debt was incurred and not paid on time then I'd encourage you to talk to a tax attorney myself or qualified representatives to determine whether or not you have reasonable clause and what the proper course of action is for getting the IRS to waive those penalties.


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law