Example Of A Penalty Abatement

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What is an example of a penalty abatement?

Example Of A Penalty Abatement

Jane Widget had an unpaid tax bill totaling $30,000, including $7,500 in penalties. Jane entered into a tax resolution program known as an offer in compromise.

The IRS wanted to enter into an installment agreement whereby Jane would repay the entire $37,500. Jane, however, wanted to have the penalty abated due to her husband passing away three months ago.

Jane prepared a request for penalty abatement letter and submitted it to the IRS. The IRS agreed to it. Jane and the IRS entered into an Offer in Compromise agreement whereby Jane repayed a total tax bill of $30,000.

Jane had her penalty abated.

   

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