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Tuesday, February 23, 2010

Tax Penalty Abatement: Worth a Try

Fuckin' taxesImage by blmurch via Flickr
Now that the IRS is no longer breathing down my neck (in other words, I'm in a payment plan) I'm beginning to wonder if they would consider abating the penalties they have assessed over the past several years.

According to a post at Financial Web, the IRS accepts 7 excuses for penalty abatement.  Now we're talking. Ever since my college days of talking professors into accepting late papers, I've been the excuse queen.

And I'm not just making empty excuses. I have shown a good-faith effort attempt to pay the debt, and we had extenuating circumstances at the time. (Number 6 on the list:
6. Lack of funds, but only when the taxpayer can demonstrate the exercise of ordinary business care and prudence

The interest and penalties can really add up (one might even say "compound") over time. In the same way that that bargain you put on your credit card can end up costing three times as much, the interest and penalties can dwarf the actual tax owed.

This is yet another example where sticking my head in the sand has done nothing for me.

So, first order of business, 2009 taxes.  Then, the abatement process. Wish me luck.
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