Key Takeaways
- Which can increase it dramatically.
- Interest on tax liability is set by a statutory rate, so absent some major error by the IRS in the calculations, you are probably not going to get the interest waived.
- The penalties on liability are usually pretty stiff, however penalties can be waived under certain circumstances with reasonable cause if there is a good faith excuse for why the tax debt was incur…
Clients will often owe fifty thousand, one hundred thousand or even millions of dollars in liability, and while they do not often object to the actual amount that is owed, they do object to the interest and penalties that get tacked on to the liability. Which can increase it dramatically. Interest on tax liability is set by a statutory rate, so absent some major error by the IRS in the calculations, you are probably not going to get the interest waived. The penalties on liability are usually pretty stiff, however penalties can be waived under certain circumstances with reasonable cause if there is a good faith excuse for why the tax debt was incurred. If there is a genuine reason why the debt was incurred and if you believe you may have reasonable cause, you can get advice from a tax attorney on how to assess your chances of successfully having penalties waived.
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