Think you were unfairly charged with tax penalties? Let Sky View Tax Resolution help you challenge them today!
Whether randomly chosen or specifically targeted, an IRS audit reviews your tax return for mistakes. If errors are found, you may face extra taxes, interest, and penalties. In fact, over 80% of audits result in adjustments, many including accuracy-related penalties. Unintentional mistakes usually come with a 20% penalty, while significant inaccuracies may be penalized at 40%. Accuracy-related penalties may include:
Applied if your lack of care or disregard for regulations caused underpayment.
Triggered if your income is understated by $5,000 or 10%, whichever is greater.
Penalties apply if you overvalue donated property or undervalue depreciating property. Errors of 200% result in a 20% penalty, while 400% errors mean 40%. No penalty applies if the error is $1,000 or less.
Applied if you overstate pension liabilities by more than $1,000. A 200% overstatement brings a 20% penalty; 400% brings 40%.
Imposed when you undervalue property reported on an estate or gift return. No penalty applies if the understatement leads to less than $5,000 in unpaid tax.
Applied if underpayment results from a disclosed tax shelter or avoidance scheme. A 20% penalty applies for disclosed cases, while lack of disclosure increases it to 30%.
In cases of proven fraud, penalties can reach 75%. Fraud penalties cannot be combined with accuracy penalties, but you’ll still owe interest starting from your return’s due date until everything is paid.
You may avoid penalties if you can prove a reasonable cause for errors or provide valid support for your reporting. Once the audit ends, you must either accept and pay, or request reconsideration. Don’t pay upfront if you plan to dispute the findings. If payment is already made, you’ll need to request a refund. The IRS may reconsider if:
You missed the audit appointment
You never received the audit notice due to address issues
The IRS ignored valid documents you submitted
You have new evidence to present
You filed a corrected return to replace the IRS-prepared one
The IRS made errors in calculations or processing
Penalties and interest will keep adding up while waiting for the IRS response. If your reconsideration is denied, other tax relief solutions may still be available. At Sky View Tax Resolution, we’ll guide you toward the best resolution. Contact us today for a free consultation.
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