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Penalty and interest relief

SEE 3 Chapter 21 · IRS outline 3B1, 3B2, 3B3, 3B4, 3B5

Penalty relief is one of the most common, and most satisfying, services an enrolled agent provides. Copperline filed late; Ruth paid late after a hospital stay; Daniel relied on an IRS letter that turned out wrong; the Okafors' refund sat for two years while interest piled up. Which penalties can be removed, and on what grounds? Can interest ever be removed? This chapter answers those questions, shows the interest arithmetic, and walks through how to ask.

In this chapter

1. Which penalties can be removed
2. First-time abatement
3. Reasonable cause and statutory exceptions
4. Interest abatement
5. How interest is computed
6. How to request relief, and what to do if it's denied

This chapter has 6 lessons and 50 practice MCQs with explanations, plus flashcards and a recall sheet.

What this chapter covers

• Which penalties can be removed
• first-time abatement
• reasonable cause
• statutory exceptions
• interest abatement
• recomputing interest
• how to ask

Chapter 20: Trust fund penalty, decedents, account fixes and refund claims · Chapter 22: Representing a taxpayer in an examination