Although interest must be assessed by law, the Internal Revenue Service (IRS) can reduce the amount of interest you owe if the agency determines the interest was improperly calculated or the process took too long.
Who Qualifies for a Lower Interest Rate?
No later than the earlier of the three years after the date the return was initially filed and (ii) two years after the date the tax was paid, submit your claim.
For tax years beginning after December 31, 1978, the interest abatement request must be made.
Interest accrued on taxes such as income, estate, and gift taxes and certain excise taxes must be the subject of the request. Interest accrued on payroll taxes is not eligible for abatement.
You and your agent had nothing to do with the error or the delay that ensued. Go to the official page and download this in detail.
This issue is related to the following and concerns an unreasonable mistake or delay in our performance of ministerial or managerial acts:
Regulatory Measures Adopted by the Ministers
A ministerial act happens to be a mechanical or procedural act that occurs during the processing of a taxpayer’s case and does not include the exercise of judgement or pleasure and occurs only after all necessary preceding steps, such as meetings and review by supervisors, have been completed. This kind of action typically takes place in the very last steps of handling a case. A determination of how federal tax law should be applied is not a routine administrative task (or any other federal or state law, for that matter).
Management by Objectives
Managerial acts are administrative actions that require the use of judgement or discretion in relation to the management of personnel, or the loss of records, either temporarily or permanently. This is an administrative action taken in the course of handling a taxpayer’s case. Making a call on how to apply federal tax law is not something that falls under the purview of management (or any other federal or state law).
To what extent is it possible to lower interest rates?
The taxpayer includes the unpaid balance on their income tax return. There was an irrational error (or delay) during the audit, resulting in additional liability (tax and penalty). As a result of the audit, we now have more debt to pay.