My tax return of 2011 was audited and charged a 20% accuracy related penalty under 6662d. I talked to the tax examiner and she asked me to write an explanation letter to get the penalty abated. I did that, but she denied my abatement. What can I do now? Should I try to get it abated in the local office? How much can the local IRS office e do? I haven't used the official abatement form yet.
Yes - the local office can make adjustments to your return just like the field examiners or auditors. Keep in mind that the 6662d accuracy penalty is almost always assessed with an audited return fails the examination. Both the examiner and the local office use pre-defined criteria to determine if the penalty can be abated - it's difficult to get an exception, even when a supervisor gets involved.
A better option is eliminate the reason the audit failed, especially since it's so recent (2011). Usually this can be done by amending the return. But to do this you do need a professional. The approach is simply to identify the issues that lead to the audit, then find alternatives for modifying the return. In 99 out of 100 returns, there are ways to report the information so that the audit no longer applies. When the audit reason is eliminated, the penalty also is automatically reversed.
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You should have consulted an attorney or a CPA to request an abatement instead of requesting it yourself. The reason is that a professional familiar with IRS abatements would have drafted an abatement request based on the IRS specific criteria iset forth n the Internal Revenue Manual.
You should consuilt a professional familiar with this area of tax law and have your abatement request reconsidered.There is a specfic procedure for this also.
Phillip M. Smith Jr.
Los Angeles Tax & Business Attorney
Licensed in the United States Tax Court
Call: 323-292-4116 or 562-505-1004
THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. The answer to question does not create an attorney-client relationship or otherwise require further consultation. Mr. Smith is licensed to practice law throughout the state of California with offices in Los Angeles County. He is authorized to handle IRS matters throughout the United States, and is also licensed to practice before the United States Tax Court. His phone number is 323-292-4116 or his email address is email@example.com.
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