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Penalty Abatement

Baltimore Tax Attorneys providing back taxes help to residents of Baltimore and the Washington D.C. metro area.

“The only two certainties in life are death and taxes.” This quote – commonly attributed to Benjamin Franklin and Daniel Dafoe in the 1700s – may seem true if you’ve been hit with back taxes - and a penalty, to boot! However, Rosenberg Martin Greenberg tax lawyers may be able to help you out of a terrible jam by crafting the right legal defense. You’ll still have to pay your taxes, of course, but you can at least try to get out of a late filing or tax evasion penalties at the very least.

Common Maryland Tax Penalties

The state of Maryland levies the following penalties and fees:

  • 13% annual interest rate on all unpaid taxes
  • 10% penalty if the unpaid tax is paid after the due date
  • 25% penalty for failure to comply with a notice and demand for return
  • 25% penalty for the underpayment of tax

Worse yet, the State Comptroller releases the names of the “Top 50 Tax Evaders,” so business owners caught in arrears may be subject to public ignominy on top of it all! It’s important to find a Maryland tax lawyer to help keep your name out of the mud and get the break you deserve, given your difficult circumstances.

Federal IRS Tax Penalties

There are over 100 possible penalties the IRS can level against a taxpayer. According to Forbes, the IRS leveled 37 million tax penalties in 2012.

Common reasons for IRS tax penalties:

  • Penalties for late tax returns: If you miss the due date to file your taxes, you are subject to a late filing penalty that ranges from 5 percent each month (not to exceed 25 percent).
  • Tax evasion penalties: This penalty is assessed based on how much tax you owe. It ranges from 0.5 to 1.5 percent for each month the tax is not paid in full.
  • Accuracy penalty for substantial understatement: If you underreport your income, you’re subject to pay 20 percent of the net understatement if your stated tax is 10 percent or $5,000 below what is truly owed.

Accuracy penalties for negligence or disregard of the rules and regulations:

  • Fraud: You may be whacked with a 75 percent civil penalty if you are caught trying to defraud the IRS of your tax obligation.
  • Bounced check penalty: If your tax payment check bounces, you may wind up owing 2 percent in fees (but not less than $25).
  • Frivolous return: A fine of $5,000 can be imposed if you do not include enough information on your forms to determine the correct tax or if the information provided shows that the tax reported is incorrect.

No one wants to be on the hook for these pocket-gouging tax penalties. It’s time you call Rosenberg Martin Greenberg to help you out of this situation, particularly if the amount owed will be above $20,000.

Acceptable Defenses Used in Penalty Abatement

Of the 37 million tax penalties in 2012, the IRS later abated about 5 million of those penalties when taxpayers or their representatives contested them.

The Baltimore tax attorneys at Rosenberg Martin Greenberg have used the following “reasonable causes” to win penalty abatement:

  • Divorce
  • Death in the family
  • Major illness
  • Long-term unemployment
  • Incarceration
  • Ignorance of the law
  • Forgetfulness
  • Undue hardship
  • IRS error
  • Natural disasters – hurricanes, wind storms, floods, fires
  • Theft or destruction of tax records
  • Poor advice from a tax representative
  • No previous tax penalties (“First Time Waiver”)

Penalty Abatement: What Happens Next?

Navigating penalty abatement law can be complex, so it’s best to choose a trusted professional to see you through the process from start to finish. Maryland-area residents have the benefit of working with Rosenberg Martin Greenberg who offer peace of mind that your matter is in capable hands.

The process could take between 30 days and two years, depending on the complexity of the issues raised, appeals, and the IRS backlog. A friendly, understanding ear lessens the enormous burden of stress placed upon you by the sudden turn of events that now threaten your financial security.

If you are granted a penalty abatement on either the state or federal level, you will likely pay the underlying tax and interest in full or through an installment agreement, minus the fees and penalty amount. In some cases, your tax lawyer may work for an offer in compromise, which allows you to settle a tax debt for an amount less than you owe – with penalties and interest removed, as long as your returns in the next five year remain spotless.

Why Hire a Tax Attorney from Rosenberg Martin Greenberg?

Our experienced tax attorneys regularly appear before the Maryland Comptroller, the D.C. Office of Tax & Revenue, the Maryland Tax Court, and the Maryland circuit and appellate courts, in addition to the Internal Revenue Service, the U.S. Tax Court, federal district court, and the U.S. Department of Justice.

Unfiled tax returns and criminal tax proceedings are our specialties, so if you live in Maryland or the Washington D.C. metro area, call 410-727-6600 to schedule a consultation. You can alternatively email Brian Crepeau at bcrepeau@rosenbergmartin.com.

Talk to a Baltimore Tax Attorney Today

If you are seeking counsel for a tax related legal matter, contact the Rosenberg Martin Greenberg Tax Controversy experts.

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Rosenberg Martin Greenberg

25 South Charles Street, 21st Floor MD 21201
Phone: 410-727-6600
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Rosenberg Martin Greenberg

705 Melvin Avenue Annapolis, MD 21401
Phone: 410-727-6600
Map & Directions