Maria, a freelance graphic designer in Phoenix, fell behind on her estimated tax payments during 2022 after a major client went bankrupt and left her with $30,000 in unpaid invoices. She filed her 2022 return late in October 2023, owing $18,500 in federal taxes. By the time she contacted Global Gate Tax Relief, the IRS had assessed $4,625 in failure-to-file penalties and $1,850 in failure-to-pay penalties, plus $2,340 in accumulated interest — bringing her total balance to over $27,000.
Our team reviewed Maria’s compliance history and found she had no penalties in the prior three years. We requested First-Time Penalty Abatement for the failure-to-file penalty ($4,625) via phone — approved in one call. For the failure-to-pay penalty, we submitted Form 843 with reasonable cause documentation showing the client bankruptcy and its financial impact. The IRS granted full abatement of the failure-to-pay penalty ($1,850). With penalties removed, her interest was recalculated, saving an additional $780. Total savings: $7,255. We then set her up with a streamlined installment agreement for the remaining balance.