Yes. There’s nothing really we or anyone can do to reduce this amount. While the rates are lower than a loan or credit card they do hurt. Unfortunately while there are ways to reduce or eliminate these penalties, most people don’t qualify for abatement
Renaldo’s 2006 tax return was examined by IRS and was found to have UnderReported Income (URI) of $12,773 in 401k distributions.
IRS then assessed over $6,775 in tax and penalties and interest.
IRS then tried to collect it. That’s when Renaldo’s paycheck was levied.
Then he called us.
So we quickly got one of our IRS reps to agree to let Renaldo pay $150 per month instead of having to suffer through a wage levy that would have taken 80% to 85% of his net paycheck. It would have been impossible for Renaldo to pay his rent and utilities and make his car payment and buy gas for the car and feed his two young children (not to mention himself and his wife).
