Tax Penalty Abatement Letter Request & Form 843

Tax Penalty Abatement Letter Request & Form 843
Below is a sample penalty abatement letter request to the IRS. It is intended to be used as a guide and is for information purposes only when trying to abate tax penalties.

Date:  September 20, 20xx

To:  IRS (Penalty Abatement)
(address given on notice of tax amount due)

From:  Jane Doe
123 Any Street
Any City, State 99999
SSN: (***-**-****)

Re: Request for Penalty Abatement

Dear Sir:

I am writing to request an abatement of penalty in the amount of $(amount) as assessed in the attached notice that is dated ____/____/____.

The reason why I _________(pick one)

• Paid late 
• Filed late 
• Failed to report income 

was because I ____________ (pick one) 

• Had a serious medical condition 
• House burned down 
• Documents were stolen 
• Death of a close family member 
• ...or any other reason that prevented you from complying with the IRS requirements 

Please find the enclosed (documents that support my claim) 

• Death notice of a family member 
• Letter from a doctor stating the conditions of your illness that prevented you from filing or paying 
• Picture of house burned down in fire 
• Insurance notice of theft of private property and documents 
• ...or any proof you can enclose (a copy of) to prove statement above 

Please consider my request for abatement of penalty based upon reasonable cause. If there are any questions or further information required, I can be reached at (telephone number) from 9am to 6pm. I have enclosed a payment in the amount of taxes owed, net of the penalty portion.

Sincerely,
/s/ Jane Doe

Editorial Note:

• If you have the funds to pay, you should pay the tax owed. 
• If you do not have the funds, you can apply for an Installment Agreement to pay back taxes owed over time or file an Offer-in-Compromise based upon reasonable collection potential (RCP).
• When enclosing your documents, be sure to keep copies for yourself.
• Review the penalty to determine:
• how and why it was assessed (late-file, late-pay and/or underreporting penalties), 
• what happened to create a situation for the taxpayer (TP) where a penalty was assessed (why the TP didn’t file or pay), and 
• whether the penalty abatement program would benefit the TP, and
• should TP apply for penalty abatement?
• For example, a TP who is Currently-Not-Collectible (CNC) would not benefit from penalty abatement; although, a first time abatement may be beneficial for someone who qualifies for CNC and has maxed out the 25% failure to pay penalty on their oldest tax year. 
• Abatements can be requested and authorized over the phone with ACS.
• More difficult to obtain are Reasonable Cause abatements. These abatements generally must be submitted on Form 843 and have well established reasonable cause criteria that must be met to qualify. File for these abatements at the end once a collection status has been resolved for the client.
• It will take a few months to get a response from the IRS, and whether the abatement is possible.  
• Reason for an abatement request cannot be illegal or a ‘protester’ argument. 
• When filing Form 843, know the IRS is the determining party. The TP will receive notice of acceptance or denial within three to six months. Any denial has appeal rights, so if the TP disagrees, the TP can respond to the IRS denial accordingly.
• IRM §20.1 contains the Penalty Abatement Handbook, which includes the reasonable cause standards.

Enc.

50 Good Reasons to See Your Tax Advisor

50 Good Reasons to See Your Tax Advisor
1.  Changed your job address
2.  Changed jobs
3.  Big raise or bonus
4.  Exercised a stock option
5.  Retired
6.  Married or divorced
7.  Had a child  
8.  Adopted a child
9.  Child off to college
10. Child finished college
11. Opened an account for a child
12. Received unemployment
13. Started receiving Social Security benefits
14. Started receiving a pension
15. Cashed in an IRA
16. Won a prize
17. Won big at casino or track
18. Won the lottery
19. Served as paid executor
20. Received a director's fee
21. Won a lawsuit
22. Received alimony
23. Paid alimony
24. Sold stocks or securities
25. Invested in mutual funds
26. Opened a qualified retirement account
27. Sold your home
28. Bought a home
29. Helped kids buy a home
30. Refinanced your home
31. Remodeled your home
32. Started a business
33. Wrote a living trust
34. Added someone to title on your home
35. Bought rental property
36. Remodeled rental property
37. Started renting out your home
38. Let a friend move into a rental property at reduced rent
39. Sold rental property
40. Began using your car for business
41. Sold your business car
42. Became a telecommuter
43. Allowed spouse to use business car
44. Cashed in EE Bonds
45. Inherited money
46. Inherited an IRA or pension
47. Reached age 59 1/2
48. Reached age 70 1/2
49. Became disabled
50. New tax law questions (Tax Code is constantly changing)

Pricing - Co$t of Service?

Pricing - Suggested Co$t of Service? 

Pricing Stephen B Jordan, EA
FREE e-filing for any return we prepare!
Most of our clients are up to date; however,
we can, and do, frequently handle any worries
that come from being behind with tax returns.

How much does it co$t to use an EA to prepare your tax return? (includes Federal & All 50 States)	Fee
Kids & students of clients are done for	FREE
Personal 1040-EZ	FREE
Personal 1040-A	$49
Personal 1040	$99
Personal 1040 w/ Schedule-A, B,  limited Schedule-D and related state	$225
Schedule-C and required S/E schedule e.g. sole proprietor or LLC	add $50
Schedule E or F – Rental or Farm schedule	add $50
• Corporation/S-Corp 1120/1120-S  includes applicable state & compilation. • Partnership 1065 • Trust 1041  • Estate 706  • Gift 709  • Non-profit 990 organization	$400- $1,000
FREE - The business owner's personal return is prepared for FREE as part of the corporate price.	FREE
Increased or decreased complexity of the return will increase or reduce the cost of preparation accordingly.

SUMMARY EXPLANATION--Tax Preparation & Income Tax Planning Fees

• Income tax planning services are charged at an hourly rate -- generally $50 per hour.  Some Fees Range for Various Tax Returns (Federal & State).

• The fees charged vary for tax returns and tax planning according to the complexity of the tax preparation or income tax planning service.  No, we are not a low-priced, mass-production "return mill."  For income tax preparation when we charge by the form -- the more forms involved in a tax return, the more complex the return, the more time and attention the taxpayer's situation requires and the higher the fee.

• For new clients, we will review up to the three most recently filed federal and state income tax returns at no charge. In fact, for new clients we routinely ask to see at least the most recently filed federal and state returns. We will recommend preparation of an amended tax return if we can identify sufficient additional tax deductions to warrant the expense (or if we determine there was unreported income or other tax items required to be reported).

• Once we receive your filled-in tax data organizer, we can prepare an estimate of the fees for tax preparation based on the forms it appears your tax preparation will require. You decide whether we proceed with your tax return preparation.

Suggested Fee Range Examples ("sliding scale"):

Type of Return –  includes Federal & State	Fee
Basic Short Forms- Minimum Fee (usually)  1040-EZ/1040-A	$49– $99
Long Form with Itemized Deductions & Interest	$149- $299
Long Form for Sole Proprietor Small Business-includes FREE 1099 preparation for your sub-contractors	$250
Long Form for Rental Property & Passive Losses-includes FREE 1099 preparation for your sub-contractors	$250
Business Returns –  includes Federal & State	Fee
Corporate, Partnership, Estate	$400 – $1,000
Payroll returns	$50

Tax preparation fee includes tax and financial planning consultation with an Enrolled Agent, THE Tax Professional.  Actual fee depends upon expertise and work required for your situation and your degree of organization.All qualifying returns will be filed electronically at no extra cost. No return will be filed or released until full payment is received and proper e-file forms are signed and "in our hands" and that's the IRS' rule.  Historically, NO 1040 RETURN EVER COST MORE THAN $1,900.  Therefore, your cost will be between $99. and $1,900.  The fairest method of pricing tax returns is to charge based on the work to be completed. 

  Call us your TAXPAYER ADVOCATES!    

Haven't Filed in a While? FREE CONSULTATION ! Give Us a Call !

Taxpayer Representation Pricing*
Bronze $150 Levy Release	Flat fee will STOP your Wage Garnishment (if "financial hardship" exists) in as little as 4 business days. Our flat fee includes your tax case consultation and representing you as Power of Attorney (POA) before the IRS.
Silver $500 Full Service	If your tax debt is less than $50,000 our flat fee to represent you as Power of Attorney (POA) before the IRS is $500. The fee includes Levy and/or Wage Garnishment release (if financial hardship" exists), potential penalty abatement, Innocent Spouse Relief, Installment Agreement, Offer-in-Compromise (OIC) and/or having you listed as Currently Not Collectible (CNC) by the IRS.
Gold $1,000 Full Service	If your tax debt is more than $50,000 our flat fee to represent you as Power of Attorney (POA) before the IRS is $1,000. The fee includes Levy and/or Wage Garnishment release (if "financial hardship" exists), potential Penalty Abatement, Innocent Spouse Relief, Installment Agreement, Offer-in-Compromise (OIC) and/or having you listed as Currently Not Collectible (CNC) by the IRS.
Platinum Fee to be determined after we complete a tax debt analysis of your case.	If your tax debt is more than $1,000,000 our flat fee to represent you as Power of Attorney (POA) before the IRS will be determined after we complete your tax debt analysis. The fee will include Levy and/or Wage Garnishment removal (if "financial hardship" exists), potential Penalty Abatement, Innocent Spouse Relief, Installment Agreement, Offer-in-Compromise (OIC) and/or having you listed as Currently Not Collectible (CNC) by the IRS.

* To obtain a permanent reduction in your tax debt, it's not enough to show the IRS that you can't pay your tax bill. You must also prove you've exhausted all of your financial resources and have little hope of raising money in the future.

We will help you with the following:
* Settle your tax debt with the IRS for your "reasonable collection potential" (RCP)
* Handle all negotiations with the IRS for you
* Protect your paycheck and assets from the IRS
* Negotiate an affordable monthly payment plan to the IRS
* Discharge tax liens from your credit and property
* Negotiate with the IRS even if you have never filed a tax return!
* Prepare past due returns
* Attorney referrals to discharge taxes in bankruptcy for certain exceptions

Reasons to Hire an Enrolled Agent for Tax Representation

Reasons to Hire an Enrolled Agent for Tax Representation
Tax representation, defined as paying a Enrolled Agent to represent you before the IRS or other state agency, is not for everyone, and in many instances, may be an unnecessary waste of money. But when is it necessary?

• You are reluctant to deal with the IRS on your own. There is a "reluctance factor" to pay an Enrolled Agent for taxpayer representation.  Reluctant people get themselves into deeper trouble by procrastinating. The objective of an Enrolled Agent, or Power of Attorney third party, is sometimes essential for resolving a tax case. Furthermore, you never underestimate the PEACE OF MIND of having a qualified individual handle your dealings with the IRS.
• You owe a lot of money to the IRS. The more you owe the IRS, the higher the stakes are, and the more aggressive the IRS will get. You will benefit by having an Enrolled Agent defuse the situation as well as negotiate and handle the matter for you. 
• Your are being levied by the IRS or on the precipice of aggressive collection action. Levy release/reductions require a lot of work in a very short period of time. A Enrolled Agent will know the ropes to get the levy released quickly.
• You haven't filed for many years and/or the IRS filed returns for you (SFRs). The tendency of a non-filer is to overestimate the task of resolving their tax situation -- thinking it to be a monumental task -- due to information lost in their flooded basement.  However; most non-filer situations are NOT as a bad as the taxpayer thinks. An Enrolled Agent can clear the air by researching the taxpayer's Individual Master File (IMF) transcript record and properly determining the MINIMUM needed to be done. Based upon my experience, "SFRs" do not always need to be fixed. In some cases, your representative will recommend that the returns STAND as they are while the debt is negotiated.
• Your case is assigned to ACS Revenue Officer. If your case is assigned to ACS, the situation is deemed serious and you are in jeopardy of aggressive collection actions such as levy or garnishment of wages. ACS workers are HUMAN and capable of error and OVERSTEPPING their powers. Tax examiners use judgement when working cases.  This is the people part of the process.  Correspondence exams and ACS tax examiners work on ten different campuses.  One examiner may ask for different documentation.  And no two cases have the exact same facts and circumstances.  Having a representative automatically defuses the situation -- making sure your taxpayer rights are upheld, preventing unnecessary levy or distraint.
• You run a business that owes 941 - payroll tax or State withholding tax.  Falling behind on 941 taxes is a "red flag" for any business' "going concern" and when more than two quarters delinquent pass you are guaranteed to have your case assigned to a field officer where a Trust Fund Recovery Penalty (TFRP) may be assessed for any balance due before or after business assets have been liquidated.  The IRS can assess a Trust Fund Recovery Assessment—also known as a 100% penalty—against every “responsible person.” Under Section 6672, the penalty equals the entire amount of trust fund taxes. The IRS can seek to collect 100% from the business and 100% from each responsible person.  Payroll taxes and TFRP (which is a "vestige" of the payroll tax) cannot be discharged in bankruptcy.
• You are being audited by the IRS on your 1040 or Business Tax returns.  If your return has been selected for examination by a field agent or vis-a-vis a "correspondence" audit by the IRS -- you might benefit by having an Enrolled Agent utilize his/her skills and knowledge of the trade to insure that you are getting the best deal.   

 If you have any kind of IRS tax liability (large or small) and would like to be considered for an streamlined Installment Payment Plan (liabilities under $50,000), Offer in Compromise, partial payment plan for existing life of statute or noncollectable status) contact us for a FREE confidential consultation regarding your options please call Stephen B. Jordan EA at 603.893.9336 or go to our website Stephen B Jordan EA

• Your case will be reviewed by an Enrolled Agent
• You compare the cost/benefit of tax relief, then decide what’s best
• With your approval, your case will be settled with the IRS
• You are kept up-to-date each step of the way

Courtesy: Nukomus Armstrong, EA at Renaissance Financial Solutions, Inc.in Detroit, MI

Stephen B Jordan EA | 45 Stiles Rd, Ste 211 | Salem, NH 03079

Stephen B Jordan EA

Our location in Salem - 2nd floor 

45 Stiles Rd, Ste 211 

 Salem, NH 03079

Welcome Clients ...your Referrals are always appreciated.
• Regarding your federal and state tax returns...There are tax deductions now available to you that can dramatically reduce the amount of taxes you are paying. Most people overlook or fail to fully claim these deductions, resulting in overpayment. If you would like more information, please contact us. As you know, it is each taxpayer's responsibility to claim tax deductions for which they qualify. Stephen B. Jordan EA makes people aware of these deductions allowing people and small businesses to pay the absolute minimum in taxes.

• We have tax experts and strategists available who will review your last three years tax returns at no cost or obligation to determine the number of additional deductions you can use to reduce your tax bill. You can find out how to audit-proof your tax return, how to deduct education, travel, medical and entertainment costs, and how to avoid the most common mistakes individuals and small businesses make. If you would like more information or to request your free tax return review, call, fax or email us your name and your home or work phone number and a good time to reach you at that number. Thank you for your time and interest, and goodbye for now.
For your convenience you can contact the office using either the telephone, fax, e-mail or US Mail as provided below. We encourage you to contact our office by telephone or e-mail and ask for a FREE copy of your informative brochure "HOW TO KEEP MORE OF WHAT YOU MAKE"

tel: 603.893.9336
cell: 603.508.0124
fax: 1.888.279.9407
e-mail: stephenbjordan50@gmail.com

Mailing Address:
Stephen B. Jordan EA
45 Stiles Rd, Ste 211
Salem, NH 03079

"Put a tax expert on your side"

Canons for Stephen B Jordan EA Personnel

CANONS FOR STEPHEN B JORDAN EA PERSONNEL

• The client is the most important person in our business.
• The client is not dependent on us--we are dependent on him. 
• The client is not an interruption of our work--he is the purpose of it.
• The client does us an honor when he calls--we are not doing him a favor by serving him.
• The client is part of our business, not an outsider--he is our guest.
• The client is not a cold statistic--he is flesh and blood--a human with feelings and emotions like our own.
• The client is not someone we argue or match wits with.
• The client is one who brings us his want--it is our job to fill them.
• The client is deserving of the most courteous and attentive treatment we can give him.
• Every time we help the client to succeed, we help to insure our own success through client retention and referrals. At Stephen B Jordan, EA goals are set and periodically reviewed and scored, and new goals set. In addition, measurement tools are in place to evaluate progress and performance once the goals have been established.

The steps in accountability are:

1. Set goals and incentivize;
2. Measure;
3. Hold accountable; and
4. Reward or provide consequences.

Categories for personnel review include:

1. Technical knowledge
2. Productivity 
3. Accuracy
4. Communications
5. Dependability (includes attendance and punctuality)
6. Innovation
7. Initiative
8. Problem solving
9. Judgment
10. Planning and organization
11. Management skills
12. Analytical skills 

• We offer free QuickBooks® consulting for Growing Businesses. The fastest, easiest way to manage your business. #1 Best Seller.
• Is the IRS getting too much of your money? If you are like most people, you find the job of keeping accurate tax records is a burdensome chore. We have a supergreat accountant that can show you how to significantly reduce your tax burden as well as protecting your assets without driving you crazy. 
• We will provide to you, at no obligation whatsoever, a free 30 minute confidential analysis of your business for the purpose of recovering tax money paid, and protecting your future income and all assets. 
• The majority of income tax returns today need additional professional assistance in accomplishing the task of preparing the necessary complicated forms and schedules such as employee business expense, a home sale or purchase, capital gains on stock or other asset sales, retirement income, rentals, as well as many, many others. 
• Now, there is a convenient and low cost way to keep track of your tax deductible expenses without driving you insane. I would be happy to provide you with information about record keeping at no obligation to you. Would you please give me your name, and your home or work telephone number and the best time to reach you there. I think you will be impressed at the low cost of this service and the savings you will receive. 
• Please call me to set up a free consultation at your office or mine. Ask for Stephen B. Jordan, EA.
• Pay the Lowest Tax Legally Required by Law, Or Your Tax Return is FREE -- Guaranteed! Experienced Tax Professional's Bold Promise Puts More Money in Your Pocket and Keeps the IRS off your Back at the Same Time! (Better call Steve and get the real scoop.)
• Call for a free brochure:  "How to Keep More of What You Make"
• Hours:
• Monday - Friday -- 10 am to 7 pm
• Saturday -- 10 am to 5 pm
• Sunday -- By Appointment Only
• Personal Appointments at Your Convenience

• Credit cards accepted: Visa, Mastercard, Discover or PayPal
• An Enrolled Agent (EA) has demonstrated technical competence in the field of taxation to the IRS and is a TAX PROFESSIONAL. An EA is licensed by the US Department of Treasury to represent any taxpayer (Individuals, Businesses, Corporations, Estates) before the Internal Revenue Service.

We specialize in:

• Tax return preparation & planning - Federal & All 50 states:
• Individuals
• entrepreneurs
• partnership 
• S-Corp 
• C-Corp 
• trust & estate 
• Tax Exempt organization 
• Small business set-up 
• Book-keeping, trial balance write-up & spreadsheets 
• QuickBooks® consulting (review files) 
• Business plans & cash flow projection 
• Paychex® payroll services 
• Solving tax problems, we specialize in past due returns! 
• Taxpayer Representation - resolving tax liabilities 

• Options:
• Full pay, 
• Payment plan, 
• OIC -- Equity, 
• CNC -- debt doesn't go away. 
• Tax lien & levy assistance - bank account levies/garnished wages 
• Partial Payment Installment Agreement (PPIA) IRC§6159 (affordable monthly payment plan) 
• Innocent spouse relief. Expanded administrative appeals in many dispute areas:
• innocent spouse relief IRC§6015(b) 
• separation of liability relief IRC§6015(c) 
• equitable relief IRC§6015(f) 
• Offer-in-Compromise (OIC) IRC§7122 (settle debt for Reasonable Collection Potential)
• Attorney referrals to discharge taxes in bankruptcy for certain exceptions.

We do legitimate offers! 

• Annual participation in Continuing Professional Education courses offered by local chapters of national accounting and tax associations keeps the firm on the "leading edge" of ever-changing tax laws and accounting methods. As an Enrolled Agent, Steve is required to satisfactorily complete Continuing Professional Education in the field of Taxation at a minimum of 30 hours per year.
• Computerized offices and internet access ensures clients accurate, efficient, state-of-the-art service at a competitive price.

How you Benefit:

• Minimize your taxes
• Develop practical tax cutting strategies 
• File your returns correctly and on time 
• Make better financial decisions throughout the year 
• Receive solid accounting, budgeting and tax planning advise 
• Learn how to build your retirement savings 
• Understand how to keep only the records required by law
• Run your business more accurately and efficiently
• Implement sound financial and estate planning techniques

Affiliations:

• Massachusetts Society of Enrolled Agents - MaSEA 
• National Association of Enrolled Agents - NAEA
• National Association of Tax Professionals - NATP
• Northern New England Society of Enrolled Agents (NNESEA) 

Established 1987 • Open Year-Round