Posted On: September 21, 2011 by Mitchell A. Port

Interest Charges On Tax Liabilities

Generally, interest on a tax liability accrues from the return due date until it is paid in full, but there are exceptions in the law as mentioned below that authorize the abatement (or the suspension) of interest, as well as exclude certain periods of time when computing interest.

In case these exceptions are overlooked, the taxpayer may file a request for interest abatement using Form 843, Claim for Refund and Request for Abatement. While Form 843 is the preferred form for the filing of an interest abatement claim, the IRS will consider written signed correspondence requests containing the required elements (e.g., name, taxpayer identification number, interest period in question, signature, and the reason(s) for the abatement, etc.) of an interest abatement claim.

Excessive, barred by statute, erroneously or illegally assessed;

Attributed to certain unreasonable errors or unreasonable delays by the IRS;

Assessed on an erroneous refund;

Due on an additional liability that was not identified by the IRS in a timely manner;

Disregarded for a period of time due to a taxpayer's participation in a combat zone;

Disregarded for a taxpayer qualifying for Military Deferment; and

Due on an account for a taxpayer located in a declared disaster area.

Reasonable cause is never the basis for abating interest.