This occurs when a taxpayer has miscalculated interest, penalties, or additions to taxes that are not due. On these occasions, the taxpayer can request that the IRS correct the errors by submitting a request for a refund or reduction. Use Form 843 to request a refund or request a reduction in certain taxes, interest, penalties, fees and tax additions. If the customer technically does not qualify for a TLC due to a fine in the past three years, but does meet the requirements, present this history along with other arguments to the IRS in favor of reducing the penalty.
To uniformly enforce penalty reductions, the IRS developed a decision-making support software program called Reasonable Cause Assistant (RCA). This is good practice, as the customer may have to use the FTA exemption for a later year, and the reduction for reasonable cause will not disqualify the customer from receiving an FTA. The bill eliminates reimbursement interest related to a property tax reduction if property tax was collected and collected by mistake as a result of an error made in a statement by the oil and gas owner or operator and if the taxpayer receives the reduction or refund six months after the date the full reduction request was filed. While the IRS has tried to uniformly and consistently enforce penalty reduction determinations, the use of automated RCA has resulted in unfair determinations, including FTA decisions.
Estimated tax penalties cannot be reduced with the FTA exemption. The customer to whom the IRS grants a TLC will receive the letter 3502C or 3503C 30 for the reduction of the individual penalty for non-presentation and payment and the letter 168C (or its equivalent) 31 for the reduction of a company's non-deposit penalty. While the notification does not explicitly include it, if a taxpayer has used the penalty reduction process for the first time for an eligible return, I suggest that you (or your client) send a letter to the IRS requesting that it be reinstated for future use in light of the penalty reduction granted in this notice. To ensure uniformity among all penalty reduction requests, the IRS must create a more uniform policy to eliminate errors caused by trust in its RCA and train assigned staff to review penalty reduction requests.
If the customer has clear and reasonable cause for the sanction, present the reasonable cause argument first and request that the IRS reduce the penalty for those reasons. Keep in mind that there is an unpublished limit on the amount of penalties that the IRS will reduce under the telephone or electronic services TLC (called oral reporting authority). This form would eliminate confusion about how to request a reduction in the sentence, would define the criteria for eliminating them, and would facilitate fairness and consistency. Non-filing (FTF) and non-payment (FTP) penalties generally require a reduction because the IRS evaluates them electronically (through its computer systems) when a return is filed or a transaction is made with the balance due.
The board of county commissioners is required to reduce taxes and the taxpayer is entitled to a refund for the wrong amount and to reimburse interest equivalent to 1% per month starting from the date the full reduction request is filed. Taxpayers can request a reduction in penalties due to the accuracy of the return after evaluating them, but the reduction process may require the use of special IRS procedures or taking the IRS to court. .