News

If you owe the IRS, penalties can add up fast. The failure-to-file penalty alone can reach 25% of the unpaid tax, and the failure-to-pay penalty keeps growing every month the balance sits there. The good news is that many penalties can be removed, a process the IRS calls penalty abatement. The less welcome news is that interest is a different story. In most cases, the IRS cannot waive interest just because you had a good reason for paying late.

Below, we walk through the main types of penalty relief, explain why interest is usually off the table, and cover the narrow situations where interest relief is possible.

You've heard the radio ads. "Settle your IRS debt for pennies on the dollar under the IRS Fresh Start Program!" It sounds like a government amnesty: call a number, and your tax debt disappears.

The Fresh Start Initiative is real. It's also one of the most misunderstood (and most over-marketed) phrases in tax resolution. So let's talk about what it actually is, and then hand out a few spoiler alerts about what it is not.

When you owe the IRS and can't pay in full, the IRS decides what you can afford — and it does not use your real budget to do it. It uses a fixed set of allowable living expenses called the Collection Financial Standards. Whatever you earn above those allowances is treated as money available to pay the IRS.

That gap surprises many taxpayers. A family can be current on every bill, living modestly by local standards, and still be told it has hundreds of dollars a month "available" for the IRS. This post explains how the standards work, shows the actual figures for Lafayette, Louisiana, and explains why the IRS is not required to allow your full mortgage, private school tuition, or other expenses above the caps.

The IRS is urging every worker to do a "paycheck checkup" while there's still time left in 2026. With roughly two and a half months to go, now is the moment to find out whether enough federal tax is coming out of your pay. Discovering a shortfall in October is an inconvenience. Discovering it next April can be a crisis.

A troubling scam pattern has left many taxpayers not only robbed of their savings, but facing an unexpected tax bill on top of it. In this scheme, a fraudster contacts a victim claiming their bank account has been hacked or compromised, often invoking the FBI or another law enforcement agency to add urgency and legitimacy. The victim is told their money isn't safe where it is or will soon be inaccessible while law enforcement investigates the issue. The victim must "protect" his or her access to the funds, or the funds themselves, by transferring them into a new account the scammer controls.

Payroll tax problems are among the most serious issues a business can face with the IRS. Unlike income tax debt, which is generally owed by the business entity alone, unpaid payroll taxes can result in a penalty assessed directly against individuals — personally. That penalty is known as the Trust Fund Recovery Penalty (TFRP), and it can put a business owner's personal assets on the line even if the business itself is struggling, closed, or in bankruptcy.

For years, taxpayers with a strong compliance history have had access to an important form of penalty relief known as First Time Abate (FTA). The problem is that the relief wasn't automatic. Taxpayers and their representatives had to know it was available and request it from the IRS. Under a new IRS initiative, that relief will now be applied automatically in many cases.

The IRS recently announced a new Automatic Exemption from Penalty (AEP) program that will automatically provide penalty relief to many eligible taxpayers, eliminating the need to request First Time Abate in many situations. The change is intended to simplify the penalty relief process and reduce unnecessary administrative burdens for taxpayers who have consistently met their tax obligations.

Each year, the Treasury Inspector General for Tax Administration (TIGTA) evaluates how the IRS performed during filing season. While the report is written for Congress and IRS leadership, it also offers valuable insight into how the agency is functioning—and what taxpayers can expect when dealing with the IRS.

The Interim Results of the 2026 Filing Season show an agency making meaningful progress in some areas while continuing to struggle in others. Returns are being processed efficiently, but staffing shortages, growing inventories, and manual review continue to delay certain types of cases. Understanding those trends can help taxpayers set realistic expectations when interacting with the IRS.

A recent federal court decision could create significant refund opportunities for millions of taxpayers who were assessed IRS penalties and interest during the COVID-19 pandemic. While the legal issue is still being litigated, taxpayers may need to act before July 10, 2026, to preserve their right to seek a refund.

If you paid IRS penalties or interest related to late filing or late payment during the pandemic years, this development deserves your attention.

When cash flow becomes tight, some business owners delay payroll tax payments to cover payroll, rent, inventory, or other operating expenses. Unlike many business debts, however, unpaid payroll taxes often receive heightened IRS scrutiny because part of the money was withheld from employee paychecks and held in trust for the government.

As a result, payroll tax debt can lead to significant penalties, collection actions, and, in some cases, personal liability for individuals responsible for payroll tax compliance.