Common IRS Penalties

Taxpayers often face penalties for:

  • Late filing or late payment
  • Underpayment of estimated taxes
  • Accuracy‑related errors
  • Failure to provide information returns

These penalties can add hundreds or thousands of dollars to tax bills.

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👉See more videos on our channel about LITC Education and how CPA Clinics can help.

 
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First Time Abatement

The IRS offers first‑time abatement for taxpayers with a clean compliance history. If you’ve filed and paid on time for the past three years, you may qualify to have penalties waived.

Reasonable Cause Relief

Taxpayers may also request relief if they can show reasonable cause, such as:

    • Serious illness or natural disaster
    • Records lost due to circumstances beyond control
    • Reliance on incorrect IRS advice

Drafting Request Letters

Effective penalty relief requests include:

  • Clear explanation of circumstances
  • Supporting documentation (medical records, disaster reports, IRS notices)
  • References to the Taxpayer Bill of Rights

CPA Clinics helps draft strong letters that increase the chances of approval.

Preventing Future Penalties

  • File returns on time, even if you can’t pay in full.
  • Make estimated tax payments quarterly.
  • Keep accurate records of income and deductions.
  • Respond promptly to IRS notices.

Real Life Example – CPA Clinics in Action

Client Situation:
A small business owner received an IRS notice with $1,200 in late payment penalties. He feared losing his refund and facing liens.

CPA Clinics Response (under LITC program):

  • Reviewed IRS notice and compliance history.
  • Filed a first‑time abatement request.
  • Submitted documentation showing reasonable cause for delay.
  • Educated the client on estimated tax payments.

Outcome:
✅ Penalties waived
✅ Refund restored
✅ Client empowered with prevention strategies

CPA Clinics & LITC Connection

Through the IRS‑funded Low Income Taxpayer Clinic (LITC) program, CPA Clinics provides:

  • Free IRS representation in penalty disputes
  • Drafting and filing of relief requests
  • Appeals support for denied waivers
  • Multilingual education for ESL taxpayers

CEO Message

“At CPA Clinics, we know IRS penalties can overwhelm hardworking families. Our mission is to protect taxpayer rights, secure penalty relief, and educate clients on prevention strategies. Through the IRS‑funded LITC program, we provide this help free of cost — ensuring families keep their refunds and peace of mind.”

-Arjumand J. Khan

Contact Us – We’re Here to Help

📞 Phone: (516) 464‑7444
📧 Email: info@cpaclinics.com
🌐 Website: www.cpaclinics.com
📍 Locations: Bronx, Manhattan, Hempstead, Hicksville

Key Takeaway

IRS penalties don’t have to mean financial loss. With CPA Clinics’ free help under the LITC program, taxpayers can request waivers, prevent future penalties, and protect their refunds.