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March 13, 2016


How can you obtain tax penalty relief?

Are you a resident of Houston? Because of historic flooding that started on April 17, the IRS is giving you until September 1, 2016 to file your tax return and pay your taxes.

This announcement followed a Federal Emergency Management Agency disaster declaration. Affected taxpayers in Fayette, Grimes, Harris and Parker counties automatically qualify for this relief.

For others around the state who missed the tax filing deadline, first-time penalty abatement (FTA) may provide an option to eliminate a failure-to-file or failure-to-pay penalty. In this blog, we will discuss the requirements for FTA relief.

A three-part test

First, FTA only applies to penalties assessed in one tax year. Second, it may make sense to wait until you have paid your tax bill before requesting the late payment penalty waiver.

Individuals and businesses can request FTA relief. It will not eliminate accuracy-related penalties, however.

You likely qualify if you meet these three criteria:

  • You haven’t had a penalty in the three preceding tax years
  • You are current in filing your tax returns or have received a filing extension
  • You paid your taxes due or have set up an installment plan and are current in making payments.

When you are struggling with an unanticipated tax bill, it often makes sense to speak with a tax attorney about your options. Your unique circumstances will affect what program makes the most sense. FTA is one solution that may need to be combined with others to fully deal with a problem that has been building over several years