I have no money. Will the IRS reduce the penalties and interest?
Many times I have tax-payers come in and tell me that they do not have enough money to pay the outstanding amount that the IRS is alleging that they owe. It’s important to know that you can request penalty abatement, and have some of the penalties reduced from the taxes that you owe. One of the ways you can do this is to request a first time abatement, meaning that you haven’t owed taxes in the last three years prior to the year that you’re asking for the abatement. There are other ways to reduce penalties as well, and that’s based on reasonable cause.