Negotiating with the IRS is not as hard as one would imagine when it comes to penalties and interest! Let me qualify that statement before I get a flood of e-mails telling me I don’t know what I’m talking about.
First, interest is statutory, meaning its federal law, that under no circumstances and or situations can this interest be waived! However, interest can be deferred if you enter your client into an installment agreement or if you obtain a moratorium.
Secondly, penalties can be waived – finally some good news! However, they can only be waived after the initial principle, interest and penalties have been paid in full. Then you may apply for “Abatement”, AKA waiver of all penalties; of course this is not a guaranteed approval, but is based on the circumstances behind the delinquency ( this is where you negotiating skills on paper will serve you well ).
This is one of the many factors you must keep in mind when negotiating an IRS tax situation for your client as an Independent Arbitrator. Stay tuned for more helpful tips and strategies…
James A. Gage
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