Receiving a notice from the IRS is almost always a cause for concern, especially when the letter’s content says Initiation Agreement and communication of the process of the sanctioning process. With this title full of terminology and challenging to understand, Finance communicates what, in the jargon of walking around the home, we appreciate as sanctioning procedure after the settlement you have already received on a tax audit.
Therefore, a tax audit may end in sanction. In this case, you will face the debt that the IRS considered that you did not enter at the time and assume the sanction itself. Assume or not. Now we will see it.
What is the possibility of avoiding the fine and reducing the tax penalty?
Reduce a tax penalty to save
It is demonstrable in the proceedings of allegations made by the IRS or in a subsequent appeal that there was no intentionality or guilt when you stopped paying the IRS the amount liquidated. Now all is not lost. If you have received the notification from the Tax Agency, contain and read this article before taking your hands to your head.
Although, in all probability, you will have to face the sanction that the IRS demands, correct the error, and reduce the economic impact that the embargo derived may have on your pocket and your business. The best way to avoid facing all that we explain is to prevent it. How? By carrying impeccable accounting and tax management of your business and having a bit of online advice for it.
Reduce a tax penalty to 30% for compliance
Indeed, the possibility of applying any reduction in the sanctioned amount depends on your predisposition to enter the ring; in other words, it depends on showing conformity or disagreement with the debt derived from the sanctioning procedure.
In case you assume the fact that has caused the process and accept the proposal of imposition of penalty, you will have to pay the IRS the reduced fine in the following amounts:
An additional 25% on the amount already reduced if you also enter the penalty within the period indicated by the IRS and neither resort to the sanction nor the liquidation. And is that time is short.
And in case of dissatisfaction of the self-employed before a sanction? The appeal of replacement or economic-administrative claim
Suppose you are not satisfied with the resolution of the IRS, and your allegations have not taken effect during the sanctioning procedure. In that case, you can take a step forward and file an appeal for reinstatement or an economic-administrative claim, instruments with which you have as self-employed, as a taxpayer, and as a citizen to appeal the decisions of the Internal Revenue Service. Below we answer some of the questions that may arise when filing a replacement appeal or an administrative or economic claim.
When the appeal for reconsideration or economic-administrative claim is processed
Accounts with a term of one month counted from the day following the notification of the act are subject to appeal.
What is the status of the sanction when starting a repossession resource?
When an appeal for reinstatement or OER files on a sanction, the execution of the punishable act is automatically suspended until a resolution is issued.
Is the right to a reduction of tax penalty maintained?
No, when the sanction is appealed, you lose the right to a reduction of 25% of it that is applied only in case of compliance with the payment of the sanction according to the General Tax Law. If the resolution fails against you, you will have to face the entire sanction.
Can you appeal the resolution of the appeal?
Of course, yes. If you continue to be dissatisfied with the resolution, your next step would be to file an economic-administrative claim with the Economic-Administrative Court.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.