IRS Employment Cuts Elevate Need for Penalty Abatement Services

By: Charlotte Way, JD, LLM, CPA

With the news full of cuts to IRS budgets and staffing, it’s easy to assume that fewer compliance issues will follow. That’s a misperception because automated systems will continue to generate penalty notices. In addition, you’re likely to face greater difficulties in disputing penalties and reaching a timely resolution with an under-resourced agency. Penalty abatement services are more important than ever as we enter this next phase of tax compliance enforcement. 

It is common for business entities and nonprofit organizations to receive penalty notices concerning filings of Forms W-2, 1099-MISC, 1099-NEC, 1094-C, 1095-C, 941, and 940. 

Tax resolution experts are experienced in working with the IRS to resolve penalties based on these filings and other tax compliance matters. With a reduced IRS staff, their expertise in guiding IRS agents to the correct resolution may prove invaluable.

Tax Compliance Holds Risk for Everyone

Scrutiny by IRS and state tax authorities puts every taxpayer at risk of potential compliance issues, from individual filers and business owners to schools, government entities, and financial institutions. Tax controversies often arise for:

• Business entities facing IRS penalties due to late filing, late payments,  underpayments, or accounting errors on filed tax forms
• High-net-worth individuals with complex tax situations who may be subject to incorrect calculations by the IRS for such things as credits or losses claimed, and significant penalty assessments for late filing, late payments, or processing errors by the IRS
• Nonprofit organizations that are charged significant penalties by the IRS and state taxing authorities due to missing compliance elements for the required forms, misunderstood filing requirements resulting in errors, late filing, late payments, late deposits, or accounting errors on the filed tax forms

Most people react with fear and anxiety when they first receive a notice from the IRS or state tax agency. What will the repercussions be? How long will it take to resolve the problem? Can it be removed, or will I have to pay the full amount?

Unfortunately, that’s a reasonable response. Resolving a tax controversy can be a lengthy and challenging process. Penalty abatement services can ease the process dramatically. 

5 Benefits of Tax Professional Penalty Abatement Services 

1. Expertise in Abatement Procedures 

Tax experts know exactly which penalties may qualify for abatements. Their familiarity with internal IRS guidelines and the legal qualifications for penalty removal significantly increases your chances of a positive outcome. 

2. Maximum Penalty Relief

Tax controversy specialists understand how to effectively present your case to qualify for abatement. They’re able to articulate your facts and circumstances clearly and explain why you’re eligible for relief, ensuring you get the maximum penalty reduction the law allows.

3. Time and Stress Savings

Working with the IRS to resolve penalty matters can be extremely lengthy process. Qualified professionals will ensure all compliance deadlines are met regarding notices, collections are placed with the government authorities to prevent liens on the business, and the matter is resolved in as quickly and efficiently a manner as possible.

4. Proactive IRS Representation

If the IRS denies your initial request for relief, experienced professionals can quickly and strategically appeal your case. They’ll initiate clear, direct conversations with tax examiners or appeals officers and present a strong defense of your position.

5. Knowledge of Procedural Changes

IRS staffing reductions mean longer wait times, more automated penalty notices and increased procedural hurdles. A specialist’s expertise is invaluable for helping you successfully navigate these new challenges, minimizing delays, and reducing the stress you’d otherwise encounter from long hold times and repeated IRS contacts.

Tax Controversy Resolution Professionals Can Ease the Strain of Penalty Notices

The experienced tax controversy specialists at Mauldin & Jenkins are available to help respond to any notices from the IRS. Our team of tax controversy professionals has real-world expertise with successfully removing penalty assessments based on reasonable cause.  If penalties are charged, our experts can help navigate the IRS penalty abatement process, including collection holds and Appeals representation, if necessary.