Does a Payment Plan Stop Penalties and Interest?

October 19, 2020
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Taxpayers should pay their taxes as soon as possible to stop accumulating penalties and interest and reduce chances of being the subject of an IRS tax investigation. In case you can’t pay your taxes, you should consider entering into an installment agreement. You can also get relief from late tax penalties if you tried to comply with the legal requirements but failed to meet your tax obligations due to unfortunate and uncontrollable circumstances. There are instances when taxpayers receive a notice from the IRS with incorrect information. In such circumstances, they should talk to a tax resolution attorney and try to resolve the issue and completely get rid of the penalty. Continuing further, let’s look at the different penalties and interest charges that can be levied by the IRS and the available relief options.

When Does the IRS Charge Penalties?

When taxpayers fail to file their tax return by the due date i.e April 15, the IRS can charge penalties on late taxes. In some cases, taxpayers may request an extension to file their tax return and make sure that they file within the extended period to stop the penalties from accumulating.
The IRS may also charge penalties when the bank doesn’t honor their check or any other payment mode.

Which Penalties May be Eligible for Relief?

Penalties on the failure to file a tax return
Penalties on failing to pay taxes in full and on time

What are the Different Types of Penalty Relief?

Reasonable Cause: Taxpayers can get relief on penalties related to reasonable cause if they succeed in showing the IRS that they tried to meet their tax obligations by all prudence and ordinary business but failed to do so due to some unfortunate and uncontrollable circumstances.
First time penalty abatement: The IRS can offer administrative relief from penalty applicable under First Time Penalty Abatement policy. Taxpayers can qualify for administrative relief on failure to pay their taxes on time if they have no penalties for the past three tax years and have filed all the returns on time. Taxpayers who received incorrect advice from the government may also qualify for administrative relief.
Statutory Exception: Taxpayers who receive an incorrect oral or written advice from the government may also qualify from exemption from penalties. In such cases, taxpayers should seek advice from IRS problem resolution attorneys and file an IRS tax investigation by filing form 843 to claim for refund and request for penalty exemption.

Wrap Up

The IRS will remove the interest charged on penalties when the taxpayers submit a valid reason justifying the delay in tax filing and payment. The interest will continue to accumulate until the account is fully paid. If there is any issue that needs to be resolved with the notice, a penalty on interest will not be applicable. To know more about IRS problem resolution and penalties, consult with MyIRSteam’s tax resolution attorneys who are dedicated to finding the best solutions for IRS tax problems. For a free consultation with a Dallas IRS lawyer, simply call (972) 426-2553, or fill out our contact form and we will get back to you as soon as possible.

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Brent Vahle

19:13 02 May 24

I called to see if they could help reduce some penalties and fees. The person I spoke with told me it might be counterproductive for them to take my case since their feels would likely equal the amount of penalty/interest abatement. I decided to pass on moving forward but was so happy to hear a legal team, or any business for that matter, who has that much integrity. I feel most others would likely try to take my money anyway. I hope I never have to go through this again, but if I do, I will definitely use the Law Offices of Nick Nemeth!

Jason Winkle

18:44 02 May 24

Jaime Flores was very friendly, professional, and knowledgeable. She gave me some very valuable information which helped guide me with a plan of action. The free consultation is very much appreciated.

Matthew Swigart

12:14 02 May 24

Great attorney who was able to provide quick and useful advice. Although my situation did not warrant their services, they still took the time to discuss solutions I could explore. I highly recommend visiting this office!

Tony Pantoja

12:57 09 Apr 24

Very professional and very knowledgeable, Jamie Flores was very straight forward and professional, a firm that doesn’t just take your money, Thanks

Carla Atwal

10:52 02 Apr 24

Nick was wonderful in guiding me with direction on some tax questions I had. He was concise, and to the point, and was happy to provide general info to me at no charge. I truly appreciate him and would highly recommend him.

Miguel Alvarado

15:56 25 Mar 24

By far the best attorneys I have ever worked with. They’re are very helpful and supportive from day one. They went above and beyond to make sure all my documents were submitted on time and gave updates as soon as they received them. I cannot name a single flaw in their work. Their team of assistants are very professional and seem to all be on the same page. I’ve made multiple phone calls and sent a ton of emails to their staff and they were able to help me all through the course of the case. I cannot express my gratitude enough for how excellent they handled my case.

Lucy Foy

06:55 19 Jan 24

My first appointment I had with, Tax Attorney Nick Nemeth, gave me such a sense of relief. He listened and gave me his professional advice, Mr Nemeth took my case. I was well kept updated, by phone calls and letters. That really impressed me and gave me so much confidence in them. The case went on for a couple of months. The day I received the call from one of his team members Kyle, informing me that the case was resolved and that I owed absolutely nothing to the IRS, I was overwhelmed with joy. I would recommend this law firm to anyone that needs help, with any tax issue. Thank you, to the Law Firm of Attorney Nick Nemeth and his team.

Bradley Runyon

20:17 13 Jan 24

I received a tax bill in the mail from the IRS last year in 2023. The fees and penalties I owed were something I myself could not afford. I reached out to Nick Nemeth's firm and received the best experience you could imagine. The team was professional, educational, and fast. If you have a tax issue with the IRS using another firm other than Nick Nemeth's would be an error in judgment. I would recommend their services above others.

Sue Hulseman

19:55 11 Jan 24

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R G

20:53 21 Dec 23

I had an incompetent tax preparer, who also ignored several notices from the IRS, which in the end resulted in a lien on my property. I did not know what to do and an attorney friend recommended that I contact the Nick Nemeth Law Offices. I met with Jamie Flores and Ivan Nalbantov in December 2021 for a free consultation, and right away was impressed by their thorough examination of my paperwork and extensive knowledge of IRS tax laws. I felt not pressured and appreciated their advice and in the end decided that I would pursue resolving the issue by myself. I paid the IRS Civil Penalty and, as recommended also submitted a letter to the IRS requesting a refund and explaining what happened. I am glad to report that my persistence finally paid off. My case took two years to resolve and I finally received a full abatement/refund check from the IRS in December 2023. I could not have done this without the straightforward recommendation of Jamie and Ivan; and I highly recommend the Nick Nemeth Law Offices to anyone needing help with the IRS.

Susan Wilson

03:27 25 Jan 23

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Sarah Howard

03:44 14 Nov 22

I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.

M W

00:33 07 Aug 22

I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.

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23:49 03 Aug 22

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19:44 12 Jul 22

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When Does the IRS Charge Penalties?

Which Penalties May be Eligible for Relief?

What are the Different Types of Penalty Relief?

Wrap Up

What Our Clients Have to Say

Proud to have received
“IRS Tax Lawyer of The Year, USA"
at FM Taxation Awards 2024

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When Does the IRS Charge Penalties?

Which Penalties May be Eligible for Relief?

What are the Different Types of Penalty Relief?

Wrap Up

What Our Clients Have to Say

Proud to have received “IRS Tax Lawyer of The Year, USA" at FM Taxation Awards 2024

Proud to have received
“IRS Tax Lawyer of The Year, USA"
at FM Taxation Awards 2024