IRS Penalty Relief Attorney in New Jersey & New York
IRS penalties can turn a manageable tax balance into a much larger problem. Failure-to-file penalties, failure-to-pay penalties, accuracy-related penalties, payroll tax deposit penalties, and interest can add thousands of dollars to what you owe.
Todd S. Unger helps individuals and businesses evaluate whether penalties may be removed, reduced, challenged, or addressed as part of a broader tax resolution strategy.
Tax Penalties and Interest Can Escalate Quickly
For many taxpayers, the primary concern is not only the original tax owed, but the penalties and interest that continue to build on top of it. Over time, these additional costs can cause a smaller tax issue to become financially overwhelming.
IRS penalty relief is not automatic. The IRS generally needs a valid legal or administrative reason to remove or reduce penalties. In some cases, relief may be available because of reasonable cause, a clean compliance history, incorrect IRS action, or facts showing that the penalty should not have been assessed.
The key is identifying the type of penalty, the reason it was assessed, the available relief standard, and the documentation needed to support your request.
IRS Penalties That May Be Eligible for Relief
IRS penalties can add thousands of dollars to a tax balance. Depending on your history and the reason the penalty was assessed, it may be possible to request penalty relief or challenge the penalty through the proper IRS process.
Failure-to-File Penalties
Assessed when a required tax return is filed late or not filed.
Failure-to-Pay Penalties
Assessed when tax is not paid by the required deadline.
Accuracy-Related Penalties
Often tied to underreported income, negligence, substantial understatement, or disputed tax positions.
Estimated Tax Penalties
May apply when estimated payments were late, missed, or insufficient.
Payroll Tax Deposit Penalties
Can affect businesses that missed or miscalculated required payroll tax deposits.
Business Filing Penalties
May involve late, missing, or incorrect business tax and information filings.
Reasonable Cause vs. First-Time Penalty Abatement
Penalty relief is not one-size-fits-all. Some taxpayers may qualify based on reasonable cause, while others may qualify because of a clean compliance history. The right approach depends on the type of penalty, the tax year, the notices received, and your prior IRS record.
Reasonable Cause
Reasonable cause may apply when circumstances outside your control prevented timely filing, payment, or compliance. This may include serious illness, death in the family, destroyed records, natural disaster, incorrect professional advice, or other documented hardship.
First-Time Penalty Abatement
First-time abatement may be available for certain taxpayers with a history of compliance. This option depends on the type of penalty, prior filing history, and whether current tax obligations are being handled properly.
Failure-to-File and Failure-to-Pay Penalty Relief
Failure-to-file and failure-to-pay penalties are among the most common IRS penalties. These penalties may arise when a return is filed late, when a balance is not paid by the deadline, or when a taxpayer falls behind because of financial or personal hardship.
Penalty relief often depends on showing more than the fact that the penalty is expensive. The IRS wants to know what happened, when it happened, why compliance was not possible, and what you did once the issue was discovered.
Todd S. Unger can help determine whether your situation is better suited for first-time abatement, reasonable cause, an appeal, or another penalty relief request.
Accuracy-Related Penalties and Misreported Tax Liability
Accuracy-related penalties can be especially serious because they often involve the IRS claiming that income was underreported, deductions were improper, credits were overstated, or the return reflected negligence or a substantial understatement of tax.
These penalties may arise after an IRS audit, CP2000 notice, business income dispute, brokerage or cryptocurrency reporting issue, 1099 mismatch, or disputed tax position. In some cases, the penalty may be challenged by showing that the taxpayer acted with reasonable cause and good faith.
A strong response should focus on the facts, documents, advice received, the complexity of the issue, and the taxpayer’s efforts to comply with the law.
What Helps Support a Penalty Abatement Request?
The IRS does not remove penalties simply because they are expensive or frustrating. The request needs to be organized, documented, and tied to the correct relief standard.
A clear timeline of what happened
Copies of IRS notices
Medical records, death certificates, insurance documents, or disaster records when relevant
Proof of reliance on professional advice, if applicable
Evidence that you acted quickly once the problem was discovered
Proof that you are now filing and paying as required
What About IRS Interest?
Interest is generally more difficult to remove than penalties. In many cases, interest continues to accrue while the tax balance remains unpaid. However, if an underlying penalty is removed or reduced, interest tied to that penalty may also be adjusted.
That is why penalty relief should often be reviewed alongside the full tax balance, payment options, filing compliance, and long-term resolution strategy.
IRS Penalty Relief FAQs
Penalty issues often overlap with other tax problems. If the tax balance still needs to be resolved, review options for IRS installment agreements or an IRS Offer in Compromise.
Ask About IRS Penalty Relief
If IRS penalties have increased your tax balance, Todd S. Unger can help evaluate whether reasonable cause, first-time abatement, accuracy-related penalty relief, or another tax resolution option may apply.