topic Is this Penalty abate-eligible under First Time Abatement? in Tax law changes

Is this Penalty abate-eligible under First Time Abatement?

timbukktoo — Thu, 16 Feb 2023 17:16:26 GMT

I had to pay a Penalty to the IRS because my previous employer’s financial institution distributed to me a portion of my deferred compensation too early after retirement (by 5 months). This was categorized as a prohibited acceleration under Section 409A of the Internal Revenue Code. To correct this error, I was told to return this distribution and I was also required to file an amended 2020 tax return that includes a payment to the IRS that reflects a Penalty calculated by multiplying 20% of my distribution. My question is if this type of Penalty can be abated using First Time Abate with the IRS?

Re: Is this Penalty abate-eligible under First Time Abatement?

HopeS — Thu, 16 Feb 2023 17:41:15 GMT

Some penalty relief requests may be accepted over the phone. You can call the IRS at 1800-829-1040. They will advise you if you need to complete Form 843 (Claim for Refund and Request Abatement).

Be aware that the IRS may automatically reduce or remove the related interest if any of your penalties are reduced or removed.

See IRS Guidance in the link below:

Penalty Relief

@timbukktoo