A tax penalty abatement letter provides the IRS with at least one strong reason that explains why the taxpayer should not have to pay any penalties associated with taxes due. According to CNN Money, this letter should follow the IRS guidelines when stating the reason for a penalty waiver. The letter is written in a professional tone and includes any important taxpayer details.Continue Reading
At the very top of the letter list the date and IRS department address. Underneath, list what the letter is regarding and include the taxpayer name, tax return year and document locator number and taxpayer social security number. Placing all of this information first makes it easier for the IRS to look up taxpayer details in the database.
The opening paragraph mentions the IRS notice received in specific detail. It should include the exact penalty and IRS regulation number so that the agency understands this is a response to their assessment. The second paragraph outlines the taxpayer's situation that led to the penalty. For example, an illness that prevented paying taxes on time. This section should be very detailed.
The final paragraph firmly states the taxpayer's position as to why they feel the penalty should be waived. The exact amount of the penalty can be included in this section. The taxpayer can opt to send the letter by registered mail to ensure receipt.Learn more about Taxes
The Internal Revenue Service generally calculates tax penalty at 5 percent of the unpaid taxes for each part of a month or for the entire month a tax return is late, explains the IRS. The penalty starts to accrue the day after the tax filing due date.Full Answer >
When the Internal Revenue Service believes that a tax return was filed under a stolen identity, it suspends processing of the paperwork and mails an identity verification letter to the taxpayer, according to the IRS. The letter, identified in the upper right corner, is a 5071C.Full Answer >
The IRS 5071C letter is a letter sent to taxpayers by the IRS to verify a taxpayer's identity after the IRS received a tax return with the taxpayer's name and Social Security number. The letter is used to help identify potential identity theft.Full Answer >
A tax abatement letter should include an acceptable explanation for why the tax debt remains unpaid. Any documentation supporting the explanation should also be included along with partial or full payment whenever possible, as BackTaxesHelp.com claims.Full Answer >