Form 843 Eliminating IRS Penalties
If you have not filed your past due tax returns, you may qualify for an abatement of some or all of the penalties. The IRS penalty for filing a late tax return, is five percent, each month, or partial month, that the amount of taxes due is not paid, or not filed.
To qualify for Abatement or elimination of penalties, you will need to show proof to the IRS, that you have acceptable reasons, for filing a late tax return. These reasons, can range from, natural disasters, to illness or death in your immediate family.
More common reasons, include, missing financial records due to events beyond your control, theft, or misleading information from a professional tax person, or the IRS.
Regardless, of what your reason, you will need to be able to provide supporting documents. Example, a hospital stay for you, or someone in your immediate family, should be supported with, a statement from the doctor, or a copy of the hospital bill. If you were given incorrect information, you will need to provide documentation of who, when, and what were the circumstances.
Another valid reason, which is often times overlooked is, long term prescribed medication, which causes you to loose track of time. Medicine, which is taken for depression, often times, fit into this category. A note from your doctor, as to the date you were diagnosed with the illness or what medication you are taking, will go a long way in helping the IRS to decide in your favor.
Visits to the doctor for stress, or stress related illnesses, is another factor, which may get your penalties reduced or completely eliminated. The IRS decides each case separately. However, there are ground rules. Being completely honest about why you filed the tax return late, is your best defense.
Use Form 943, however, it is strongly suggested, that you hire a tax professional. One error could cost you hundreds, if not thousands of dollars.