Are you sick and tired of the massive penalties and interest the IRS tacks on to your tax debt? Penalties used to be a slap on the wrist. Now days, these Draconian IRS goodies are meant to choke you into submission and assure (in many cases) that you will never get out of IRS debt.

Back in the good ol' days before massive national deficits, the IRS used to charge penalties and interst as a slap on the wrist to remind you of your civic duty to file and pay your taxes in full, on time.  Now, penalties and interest are wielded as a weapon to choke you into submission.  However, the IRS will abate (forgive) penalties and will lower the interst associated with those penalties, if you can show what the IRS calls "reasonable cause" for doing so. 

Think about the reasons why you could not file or pay off your taxes when they were due.  That list may include one or more of the following:

-I was sick.
-I lost my job.
-My wife and I got a divorce.
-I'm broke.
-I had a gambling problem.
-My house was in foreclosure.
-I had to take bankruptcy.
-My creditors sued me, got a judgment and relentlessly garnished my wages.
-I had a substance abuse problem.
-I am a senior citizen.
-My kids were in the hospital.
-I had depression.
-I didn't know how to file my returns.
-I can't find my W-2's.
-My tax records were lost in a fire.
-When I called the IRS, they told me to...
-I didn't think I made enough money to file.

These are all "reasonable causes."  More than likely, there was some legitimate reason that you could not file or pay.  Don't minimize your reasons.  Just list them out and expand upon them with the facts of what was going on in your life at the time of each failure to file or pay.  You just have to convince one IRS examiner to buy into your story, and you may be able to do away with all the penalties and interest that have been haunting you.  Recent data shows that penalty abatement requests have a 50/50 success rate.  So, you really have nothing to lose.

Here is what you need to do.  List out the tax years that you failed to file or pay.  Then, match up those years chronologically with the events going on in your life which caused you to fail to file and/or pay.  Lengthy narratives are unncecessary, and probably won't be read by the examiner anyway.  Keep the tone of your letter polite and genuine, and attach supporting documentation.  Again, less is more.  Find your most genuine and convincing arguments and the data that supports those arguments and attach them.  Make a copy of your letter, and mail it to your local IRS office or the service center in your area.

The IRS is notorious for losing these letters in the shuffle.  If you have not heard from them in 60 days, do another letter telling them that you would like to have an answer and attach the original letter pointing out to them when you mailed it.  If your request is denied, write them again and tell them that you would like your request to be reconsidered or appealed.