The Truth About IRS Penalties — And How to Get Them Removed
When tax debt starts piling up, IRS penalties often make the situation worse. What begins as a manageable balance can quickly become overwhelming once late fees, interest, and additional charges are added on.
At Rappaport Tax Relief, we’ve seen countless clients come in discouraged by penalty notices — not realizing that many of these penalties can be challenged or removed. If you're feeling buried under IRS charges, here’s what you need to know.
Why the IRS Issues Penalties
The IRS uses penalties to enforce compliance. Some of the most common include:
Failure to File – Up to 25% of the unpaid tax (5% per month)
Failure to Pay – 0.5% per month, with interest added on top
Failure to Deposit (for payroll taxes) – Up to 15% depending on how late the deposit is
While they’re meant to be a deterrent, penalties often hit people already facing financial or personal hardship — and in many cases, the IRS is open to reconsidering them.
Three Ways to Reduce or Eliminate IRS Penalties
1. First-Time Penalty Abatement (FTA)
If you’ve filed and paid on time for the past three years, you may qualify for this one-time waiver — even if your current situation is messy. It’s the easiest option for eligible taxpayers.
2. Reasonable Cause Relief
This requires proving that something outside your control prevented you from filing or paying on time. Examples include:
Natural disasters
Serious illness or injury
Loss of records
Death in the family
Unavoidable financial hardship
The IRS reviews each case individually, and documentation is critical.
3. Statutory Exceptions
In some rare cases, the IRS may reduce penalties if they made a mistake or if the taxpayer received bad advice from a qualified professional. This usually applies to complex cases — and requires specific legal arguments.
Timing Matters
Penalty relief isn’t automatic — and there are deadlines. Some must be requested within a specific time window, or you risk losing the right to challenge the charge.
At Rappaport Tax Relief, we help clients:
Identify which penalties they’ve been assessed
Determine which relief options apply
Prepare and submit effective requests
Appeal any unjust denials
Why a Professional Approach Works Better
A well-crafted penalty abatement request makes a difference. Simply saying, “I couldn’t afford to pay” often isn’t enough. We know how to build a persuasive case using the IRS’s own criteria and language — and we don’t hesitate to escalate a denial to the Office of Appeals when needed.
Take Control of Your Tax Debt
Penalties are frustrating, but they’re not final. In many cases, you may be able to reduce what you owe and get back on the path to resolution — especially with the right support.
If you’re struggling with tax debt and want to explore penalty relief, contact Rappaport Tax Relief today. We’ll help you understand your options and fight for a fair outcome.
How to Successfully Navigate a Tax Audit: Breaking It Down Phase by Phase
Receiving an IRS audit notice can feel overwhelming, but audits don’t have to result in disaster. Most audits are resolved efficiently when handled correctly — the key is understanding what’s happening at every stage and knowing how to respond.
At Rappaport Tax Relief, we guide taxpayers through audits by breaking the process into clear, manageable phases. Let’s walk through exactly what you should expect and what you can do at each step.
Phase 1: Audit Selection — Why You?
Not every audit is random. The IRS selects returns based on a variety of factors, including:
Computer algorithms: IRS systems flag discrepancies or patterns that deviate from statistical norms.
Mismatched information: Differences between your return and third-party reporting (W-2s, 1099s).
High-risk deductions: Home office expenses, large charitable donations, or excessive business losses relative to income.
Cash-intensive businesses: Retail, food service, salons, and trades tend to receive additional scrutiny.
Even if everything on your return is accurate, these factors can trigger an audit.
Phase 2: Notification — Understanding Your Audit Letter
Once selected, the IRS will send you a notice outlining:
The tax year(s) under review
The specific areas they want to examine
The type of audit: correspondence, office, or field
Carefully reviewing this letter is critical — it defines the scope of the audit. It’s also your first opportunity to get ahead of the process.
Phase 3: Preparing Your Response — Documentation and Organization
This is where preparation makes the biggest difference:
Collect relevant documents: Receipts, invoices, mileage logs, bank statements, etc.
Organize materials clearly: Well-organized records reduce questions and create a favorable impression.
Understand your return: Even if a preparer filed it for you, it’s important to review the numbers so you’re familiar with what’s being questioned.
If records are incomplete, don’t guess — a professional can help reconstruct documentation when necessary.
Phase 4: Audit Engagement — Best Practices During the Review
How you interact with the IRS is just as important as the records you submit. Remember these best practices:
Be respectful and cooperative: The IRS auditor is doing their job; a professional demeanor helps maintain a constructive tone.
Limit your responses: Answer only what’s asked — avoid offering unrelated information that could broaden the audit.
Document all interactions: Keep records of every letter, phone call, and meeting.
If you choose to engage professional representation, your tax attorney or enrolled agent can attend meetings, handle correspondence, and communicate directly with the auditor for you.
Phase 5: Conclusion — Understanding the Outcomes
When the audit concludes, you’ll receive an IRS report summarizing their findings. There are three potential outcomes:
No change: The IRS accepts your return as filed.
Agreement: You accept proposed changes and pay additional tax (possibly with penalties and interest).
Disagreement: You dispute the findings, triggering an appeals process.
Even if you disagree with the audit results, you have rights — including requesting a conference with an IRS appeals officer or taking your case to U.S. Tax Court.
Your Rights Throughout the Audit Process
At every stage, you are protected by a set of taxpayer rights:
The right to professional representation: You never have to deal with the IRS alone.
The right to clarity: You can ask for explanations if you don’t understand requests.
The right to appeal: If you disagree with the final determination, you can appeal.
Exercising these rights — properly and promptly — can greatly improve your audit experience.
Why Professional Guidance Matters
Audits often involve nuances: incomplete records, questions about specific deductions, or the risk that the audit could expand to other tax years. Professional guidance can help you:
Clarify the audit scope and ensure it stays focused
Present your records properly
Communicate effectively and strategically with the IRS
Protect your interests if the audit leads to negotiation or appeal
An experienced tax professional understands IRS procedures and can guide you toward the most efficient resolution.
Audit-Proofing Your Future
Even after your audit concludes, it’s worth improving your tax practices going forward:
Maintain records for at least 3–7 years
Keep receipts for all claimed deductions and credits
Avoid estimates — use precise numbers backed by documentation
Report all income, including freelance, gig work, and investments
Proactive recordkeeping is the best defense if you’re ever audited again.
Rappaport Tax Relief: Your Advocate for a Smooth Audit
An IRS audit can feel like a burden — but you don’t have to go through it alone.
At Rappaport Tax Relief, we help individuals and businesses navigate audits strategically, efficiently, and with peace of mind. We know what auditors look for and how to protect your rights while seeking the best possible outcome.
Call today for a free consultation — let’s work together to manage your audit from start to finish and protect your financial future.
IRS Asset Seizure: What It Means and How to Protect Your Assets Before It’s Too Late
When back taxes go unpaid, the IRS has many tools at its disposal — and one of the most severe is asset seizure. Unlike wage garnishments or bank levies, asset seizures target your physical property: your home, your vehicle, your business equipment.
If you’re falling behind on tax obligations, it’s critical to understand this process so you can take action before your property is taken.
What Is an IRS Asset Seizure?
An IRS asset seizure occurs when the IRS legally takes ownership of your tangible property to satisfy a tax debt. After seizure, the IRS typically sells the property at auction and applies the proceeds to your outstanding balance.
Property commonly seized includes:
Cars, trucks, RVs, and motorcycles
Real estate (including personal residences, with court approval)
Business inventory and equipment
Investment and financial accounts
Valuables like artwork, jewelry, and collectibles
This is one of the most aggressive steps the IRS can take — and one that can disrupt your life or cripple your business.
When Does the IRS Seize Assets?
Seizure isn’t immediate or without warning. The IRS must follow a formal collection process that gives you multiple opportunities to resolve your debt voluntarily:
Assessment: The IRS formally determines you owe a tax balance.
Notice and demand for payment: An initial bill is sent requesting payment.
Collection notices: Follow-up letters warn that enforcement will occur if no payment is made.
Final Notice of Intent to Levy: This letter provides a 30-day window for you to appeal or negotiate before seizure begins.
Seizure typically occurs when:
A taxpayer owes significant back taxes
There’s been no response to IRS communication
Assets exist that could be sold to satisfy the debt
Your Rights Before a Seizure
Even though the IRS has broad enforcement powers, you have important rights as a taxpayer:
The right to be notified: Before seizure, the IRS must send a Final Notice.
The right to appeal: A Collection Due Process (CDP) hearing can be requested within 30 days of this notice.
The right to propose alternatives: The IRS must consider reasonable payment plans or settlements.
Failing to act within this 30-day window significantly reduces your options and allows the IRS to proceed.
How to Stop an IRS Seizure
It’s possible to stop a seizure before it happens if you act quickly. Common resolution options include:
Installment Agreement: Monthly payments that satisfy IRS requirements and pause collection efforts.
Offer in Compromise: If you qualify, the IRS may accept less than what you owe.
Currently Not Collectible (CNC) status: If you can show paying would cause undue hardship, collections may be temporarily suspended.
Filing a timely appeal: Stops collection while your case is reviewed.
Each option requires careful planning, documentation, and negotiation — the right professional guidance can be crucial.
Why You Must Act Fast
Once the IRS seizes and sells your property, getting it back is nearly impossible — and you may still owe additional taxes, penalties, or interest. The IRS often sells property at auction for far less than its fair market value.
The key is to engage with the IRS before they act. Early intervention gives you more options and the best chance at resolving your tax debt while keeping your assets intact.
How a Tax Professional Can Help
The IRS collection system is complex, and navigating it alone can be overwhelming. A tax resolution professional can:
Evaluate your financial situation and review your IRS file
Determine which resolution option is best for your unique case
Handle negotiations and communications directly with the IRS
Ensure appeals or payment arrangements are filed properly and on time
Protect Your Property and Your Future
If you’re facing the threat of IRS asset seizure, don’t wait — every day counts.
At Rappaport Tax Relief, we specialize in protecting taxpayers from aggressive IRS collection tactics. We understand how the IRS operates and how to negotiate effective solutions that protect your rights and your assets.
Contact us today for a free consultation — let’s work together to safeguard your property and resolve your IRS tax debt before it’s too late.