Tax Relief Help for New York City: Do You Qualify For Tax Penalty Abatement?

Whether you’re in the bustling metropolis of New York City, or in the quiet suburbs of upstate New York, Community Tax is here to solve anyone’s tax-related needs in the Empire State. No matter which of New York’s boroughs you hale from – the Bronx, Brooklyn, Manhattan, Queens, or Staten Island – the team of CTax professionals are on standby to help solve any troubles you might be in with the IRS. To find out why CTax is the nation-wide leading provider of tax services, both in the Big Apple and beyond, read on and discover the ways in which we can help fulfill your tax relief needs.

New York State and Federal Back Taxes

People not only in New York, but taxpayers all across the country, fail to file their annual returns for a variety of reasons. They might face personal or business problems, and fail to file out of fear of being unable to pay the amount they owe in taxes; a sensation of hopelessness may consume those who have led an extended period of non-filing; they might even express anti-government sentiments and believe that the hassle of filing outweighs the penalty. No matter how you find yourself owing New York state or federal back taxes, Community Tax can help get you back on track.

Remember that knowingly declining to file a tax return, or refusing to pay what is owed after filing a return, is considered a federal criminal violation of the law known as “tax evasion”. While it’s true that the IRS doesn’t usually prosecute ordinary people who’ve made simple mistakes, and tend to reserve convictions for individuals running large-scale illegal enterprises, you could still face a number of consequences by leaving your taxes unresolved. Common IRS penalties faced by individuals include:

Failure to File

When you don’t file your tax return by the mandatory due date (mark your calendars for April 15th!) and you come up on the IRS radar, you’ll be hit with a failure to file penalty. Remember that you can request an extension to file your return – even after the deadline has passed – if you forgot or need extra time. Returns due on or after January 1st, 2022 are subject to a minimum fine of $205 (subject to an annual adjustment for inflation in increments of $5) if the return is received over 60 days past due. Otherwise, you can expect to be charged 5% of unpaid tax to be reported each month for up to 5 months that the return is late.

Failure to Pay

You incur this penalty when you fail to pay the amount of taxes that are owed on your return by the due date (keep in mind that an extension to file does not extend your time to pay). The IRS calculates this penalty at .5% of unpaid tax in monthly charges. Note that a failure to file penalty is much steeper than a failure to pay; this is how the IRS encourages everyone to file, whether or not they have sufficient funds.

Failure to Pay Proper Estimated Tax

If you fail to pay enough taxes due for the year with your quarterly estimated payments (typically required among those who expect to pay at least $1,000 in tax after subtracting withholding and refundable credits), the IRS will hit you with a penalty fee calculated using Form 2210.

Dishonored Check

you’ll receive a penalty of 2% of the amount of payment for payments over $1,250. For payments under $1,250, the penalty is the outstanding amount or $25, whichever is less.

 

If you either purposefully or accidentally failed to file your New York state and/or federal taxes, you’re not alone. In fact, during the 2016 fiscal year alone, the state of New York imposed $71.2 billion in tax-related fees. The longer your balance goes unpaid, the more interest you will accrue. Ignoring your tax bill could lead to liens, levies, and garnished wages. Contact CTax for IRS back tax help and find your way back to fiscal freedom with our New York tax relief solutions.

New York Tax Relief Solutions

If you think your tax return history is beyond repair, CTax can assist. Our team in New York is trained to find the best, most cost-effective solution for tax relief help that pertains to your own unique situation. We’ll first check to see if you qualify for New York State Tax Penalty Abatement, in which case the IRS would waive all or portions of the applied penalty. Taxpayers may qualify for penalty abatement in four different ways:

  1. Reliance on erroneous written advice by an IRS officer or employee
  2. Reliance on erroneous written advice by a tax advisor
  3. Reasonable Cause
  4. First Time Abatement (FTA)

The most common requests for penalty abatement fall under reasons (3) Reasonable Cause and (4) FTA. Our N.Y. tax professionals will determine if your delinquent taxes can be attributed to what the IRS considers a reasonable cause. Reasonable cause applies when a taxpayer can prove that despite his or her best efforts, they could not meet their tax obligations due to life circumstances that were beyond their control. Some examples of reasonable cause include military service, unavoidable extended absence from the country, significant family event, serious illness, death, and natural disaster.

The dedicated New York tax relief professionals at Community Tax can help you gather the necessary supporting documents to substantiate your claim and fill out Form 843 to clear your name with the IRS. If there’s no reasonable cause for failing to meet your tax duty, we might still be able to seek abatement on your behalf in the form of FTA. FTA is available for tax payers who 1) have filed all currently required returns and paid (or arranged to pay) any due tax, and 2) have not been required to file a return or have no prior penalties on filed returns for the preceding three years. FTA can only be used once however, so if you’ve received a pardon under FTA in the past, you won’t be eligible for it again.

If you can’t qualify for New York State Tax Penalty Abatement, don’t worry; we can negotiate to find you IRS back tax help whether you live on the Upper East Side or hale from Harlem. When you use our tax relief services in New York, we’ll negotiate on your behalf to achieve an affordable IRS debt relief solution such as:

  • Installment Plan: payment plans offer a way for taxpayers who can’t pay their bill in full a way to minimize their late payment penalties plus interest. Although interest is still charged, it’s at a significantly lower rate.
  • Offer in Compromise: an agreement between you and the IRS to settle your tax debt for less than you actually owe. The taxpayer offers an alternative amount to pay instead, and the IRS either accepts or rejects the proposal.
  • CNC Status: those who can barely afford basic living expenses and receive tax relief by having their account placed on Currently Not Collectible (CNC) status. So long as you’re categorized as CNC, the IRS will stop attempting to collect your debt by, for example, garnishing your wages or placing a levy on your assets.
  • Bankruptcy: in some cases, taxpayers can discharge (wipe out) debts for federal taxes by filing for Chapter 7 bankruptcy if all of the following conditions are true:
    • The taxes are income taxes
    • You did not commit fraud or willful evasion
    • The debt is at least 3 years old
    • You filed a tax return
    • You pass the “240-day rule” (stipulating the income debt must have been assessed by the IRS at least 240 days before you file your bankruptcy petition)

Tax Relief Help in New York

Out of all the tax relief solutions available in New York, installment agreements are the most popular option. The IRS offers four different payment plans for taxpayers to choose from:

  1. Guaranteed Installment Agreement: if your outstanding balance is $10,000 or less (as of 2017), the IRS is guaranteed to agree to an installment plan if you meet the following criteria:
    • All of your taxes are filed
    • You’ll pay off your balance in 36 months or less
    • You haven’t filed or paid late in the past 5 years
    • You’ve had no other installment agreements in the last 5 years
    • You agree to file and pay on time for future tax years
  2. Non-disclosure Installment Agreement: if you owe over $50,000 and need a repayment term of over 5 years, your agreement must be negotiated directly with an IRS agent.
  3. Streamlined Installment Agreement: part of the Fresh Start Program, taxpayers can qualify for this plan if they owe $25,000 or less and agree to pay off the balance in 72 months max.
  4. Partial Payment Installment Agreement: this plan is best for those who can’t afford the minimum payment in a guaranteed or streamlined plan, as the monthly payment is based on what the taxpayer can actually afford.

Community Tax has a proven record of finding tax relief help for New Yorkers and taxpayers across the country. If you’re feeling the pressure from the government and in need of IRS back tax help, contact us today to learn how we can get you back on track and on your way to financial freedom.