Five-Minute Win: Ask the IRS to Remove a Penalty
It's the time of year when the IRS and state tax agencies send out notices for additional taxes, missed payments, and other tax issues.
If you've ever received one, you've probably noticed that the amount due can have three components: tax, interest, and penalties.
Here's something I've mentioned on the podcast over the years that has saved members of the ChooseFI community real money: You can ask to have certain tax penalties removed. The IRS calls this penalty abatement.
In fact, the IRS now automatically waives some penalties for eligible taxpayers with a good compliance history. But if you receive a notice assessing a penalty, I think it's worth requesting relief.
