News & Events

The Internal Revenue Service (IRS) imposes penalties on individual and corporate taxpayers for several reasons. These penalties begin to accrue immediately upon a filing or payment delinquency, and they can substantially increase taxpayers’ total liability. While some taxpayers will simply have to pay what they owe, there are various options for avoiding (or at least mitigating) liability for IRS penalties—one of which is filing for penalty relief.

According to a recent News Release from the Internal Revenue Service (IRS), the federal “tax gap” increased by $58 billion for tax years 2014 through 2016. At $496 billion, the tax gap during this period was the highest in history. While the IRS notes that this increase “can be attributed to economic growth,” it is nonetheless planning to institute more robust enforcement efforts in 2023 and beyond.

In a recent Tax Tip, the Internal Revenue Service (IRS) advised individuals and businesses that are behind on their federal tax obligations to consider submitting an offer in compromise. As the IRS explains, the offer in compromise program “allows taxpayers to enter into an agreement . . . that settles a tax debt for less than the full amount owed[, and s]ometimes . . . significantly less, especially if they have low income and few assets.”