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Request for waiver of penalty for medical reasons denied


Robbie

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I am speechless.  My client filed their 2018 return in January of 2020, three months after the extended due date.  I requested a waiver of the penalty for medical reasons.  My client has a chronic, progressive motor neuron disease, and I have watched him struggle over the past three years.  In 2019, during treatment for this disease he suffered tremendously, physically and mentally, and as a result, we were not able to file timely.  My request for relief from the penalty attached a letter from his doctor describing the progress of the disease and the effects on his physical capabilities and upon his physical and mental stamina.  This was the basis of my argument that he had reasonable cause to file late.

The IRS responded, after thirteen months that "the..taxes were not taken care of in a timely manner because the taxpayer is impaired and is no longer able to attend to their personal business. However, if a taxpayer continues to maintain responsibility for their own affairs, they are responsible for taking care of their own taxes."

I did not state in my letter that he was no longer able to attend to their personal business.  What I did say is that the onset of the disease created a struggle for him to prepare his paperwork in a timely fashion, but that he was ultimately able to do so while learning to live with the limitations imposed upon him by his disease.

The final insult is that I also requested an abatement of the penalty using the First Time Penalty Abatement Waiver.  They denied it as they said a review of his account history shows that 'we have charged similar penalties in the past'.  They have not.

I will take this to the Office of Appeals, but I am very angry.  Is this simply the IRS, overworked, denying all requests for a waiver of penalties?  It took them over a year to respond, with them sending correspondence saying we need another XX days to respond.

My client will be confined to a wheel chair soon.  He has filed 2019 and 2020 timely, but I am aware of the weekly decline in his ability to handle his affairs.  What a sad situation and it is amplified by the IRS's illogical response.  It is illogical in my opinion, but I am not sure how to argue about their position.  Obviously he was ultimately able to handle his affairs, he simply could not get it done in a timely fashion.  

 

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Correct me if I am wrong please.   I thought for first time penalty abatement a simple call to practitioner priority was all you had to do since they could look up prior penalties while you were on the phone to see if they qualified.   Is that not the case?   I have not had to ask for penalty abatement in years, and I think the one time I called in for first time abatement it was granted.   Is this no longer the way to do it?

Tom
Modesto, CA

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I just had a request for a first-time penalty abatement denied too, even though taxpayer has always been current.  The reason given in the IRS letter was that he did not qualify for "reasonable cause," which is not what we asked for.  Has artificial intelligence been answering these requests?  If so, it's certainly not very intelligent.

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Copied from The IRS Mind website:

"Many penalty abatement requests are denied – requiring the taxpayer to appeal the adverse decision:  the IRS uses an automated decision-making tool to make penalty relief determinations.  This tool is flawed and often produces incorrect adverse penalty determinations.  Taxpayer often receive adverse penalty abatement determinations that appear not to consider all of the facts and circumstances.   Taxpayers should appeal their decision to the IRS in order to have the entirety of their circumstances considered."

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