How to resolve Form 2290 Penalty after getting IRS notice

If you are a truck owner, you're likely already familiar with Form 2290, which is a form used to pay the Heavy Highway Vehicle Use Tax. However, if you receive a form 2290 penalty for your 2290 filing, there's no need to panic. 

Here's a comprehensive guide to help you resolve the issue efficiently.

Why Your Form 2290 is rejected and Penalty is imposed?

Firstly, you need to understand why a penalty is imposed. There are several reasons why Form 2290 might be rejected, including:

Duplicate Filing: If you submit Form 2290 twice unknowingly, it may be considered a duplicate filing, which can result in a penalty.

Payment Issue: If your payment was not received by the IRS due to technical issues, a penalty may be imposed.

IRS Technical Glitch: Sometimes, IRS website downtime can cause your submission to fail, potentially leading to a penalty.

Incorrect Information: If the information provided is incorrect or if you have missed any details, your Form 2290 may be rejected, resulting in a penalty.

Steps to Take If You Receive a Form 2290 Penalty Notice?

If you receive a penalty notice, follow these steps to resolve it

STEP 1: Review the Penalty Notice:

Once you receive the penalty notice, thoroughly review it from end to end to understand the nature of the penalty. Carefully examining the notice helps you identify the specific issue and take prompt action to resolve it.

STEP 2: Verifying the Records:

After reviewing the notice, you'll have a clear idea of why the penalty was imposed. Now, cross-verify your records to check if the penalty is valid. Review all the proofs of your Form 2290 filing, including confirmation receipts, payment acknowledgments, and any correspondence with the IRS. Ensure everything matches the details in the penalty notice.

After completing the above two steps, if you are still unsure about the penalty imposed and unclear about the next steps, you can proceed in the following two ways

1) Contact the IRS: If you have any concerns about the penalty, contact the IRS promptly through telephone to get clarity. The contact number will be provided in the penalty notice. Ensure you have your penalty notice and relevant documents handy when you call.

2)Contact Tax Professional Assistance: Another option is to seek guidance from a tax professional. They can help you understand the reason for the penalty and advise you on how to resolve it. Their expertise can be invaluable in navigating the resolution process.

Can You Appeal a Form 2290 Penalty?

“Yes, you can appeal Form 2290 penalties if you have a valid justification” says Bill West, Truck Tax Expert. 

Here’s how you can appeal:

Penalty Abatement:

In certain circumstances, the IRS may agree to abate (reduce or cancel) the penalty. Valid reasons for requesting abatement include:

• Natural Disasters: If a natural disaster has impacted your ability to file or pay on time.

• Serious Illness: If you or a close family member experienced a serious illness that prevented timely filing.

• Extenuating Circumstances: Other significant factors that made it impossible for you to comply with the filing requirements.

Do you know FTA?

The First-Time Abatement is a one-time opportunity to have penalties abated. To be eligible for FTA relief, consider the following pointers:

• Clean Compliance History: You should have a clean compliance history for the past three years, with no prior penalties for the same tax type.

• Request FTA: Request FTA relief when filing your appeal or contacting the IRS.

• File and Pay: Ensure that all required returns are filed, and any outstanding taxes are paid or arrangements are made to pay them.

Checklist for Form 2290 Appeal:

To strengthen your Form 2290 appeal, include the following documents:

• Provide copies of the Form 2290 returns you have filed.

• Include evidence that demonstrates your compliance with Heavy Vehicle Use Tax (HVUT) requirements.

• Submit records of all payments made, including the dates and amounts.

• Attach any communication you’ve had with the IRS related to the penalty.

• If applicable, provide information and documentation supporting your request for First-Time Abatement relief.

WRAP:

After reading this blog, you should have a clear understanding of how to handle and resolve a Form 2290 penalty. To avoid potential penalties associated with manual filing, always file Form 2290 online, as it streamlines the process and reduces the risk of errors.