You can ask the IRS to remove a late-filing or late-payment penalty by requesting an IRS penalty waiver for reasonable cause, which means showing that you used ordinary business care and prudence but still couldn’t meet your obligation because of circumstances beyond your control.1Internal Revenue Service. IRM 20.1.1 Introduction and Penalty Relief – Section: 20.1.1.3.2 Reasonable Cause If the IRS agrees, the penalty comes off your account, and any interest that accrued on the penalty itself is removed with it. Interest on the underlying tax keeps running until the balance is paid.2Internal Revenue Service. Penalty Relief
Before you build a reasonable cause case, check whether a simpler waiver applies. Then, if reasonable cause is your path, the request itself is a short form, a written narrative, and the documents that back it up.
Check First-Time Abate Before Anything Else
First-Time Abate (FTA) is an administrative waiver that removes failure-to-file, failure-to-pay, and failure-to-deposit penalties without any hardship showing. You qualify if you filed all required returns (or valid extensions) for the same return type during the three tax years before the penalty year, and you had no penalties during those three years, or any prior penalty was removed for a reason other than FTA.3Internal Revenue Service. Administrative Penalty Relief
Try FTA first for a practical reason. If you call the IRS to request reasonable cause and you qualify for FTA, they will apply FTA automatically.4Internal Revenue Service. Penalty Relief for Reasonable Cause Using FTA now doesn’t stop you from claiming reasonable cause in a later year. You can request FTA even if the tax isn’t fully paid, though the failure-to-pay penalty keeps accruing until it is.3Internal Revenue Service. Administrative Penalty Relief
What the IRS Accepts as Reasonable Cause
The IRS decides reasonable cause case by case, looking at all the facts and whether the event actually prevented you from complying during the window that mattered. A few grounds come up repeatedly.
Death, Serious Illness, or Unavoidable Absence
Death or serious illness of you, your spouse, a parent, sibling, grandparent, or child is one of the strongest grounds. The event has to overlap with the period you were supposed to file or pay, and it has to be serious enough to explain the lapse. Unavoidable absence works the same way. Hospitalization after an accident or incarceration during the filing period can qualify if you can show you couldn’t comply while it was happening.5Internal Revenue Service. IRM 20.1.1 Introduction and Penalty Relief – Section: 20.1.1.3.2.2.2
Fire, Disaster, or Destruction of Records
Losing your records to fire, flood, or another disaster can support relief, but the disaster itself isn’t enough. You have to show ordinary business care and that the event specifically kept you from meeting the deadline. A fire two days before the deadline is a strong story. A fire six months earlier, with no attempt to reconstruct anything since, is not.5Internal Revenue Service. IRM 20.1.1 Introduction and Penalty Relief – Section: 20.1.1.3.2.2.2
Undue Financial Hardship
This one applies to the failure-to-pay penalty. The IRS looks at whether paying on time would have caused substantial financial loss, such as being forced to sell your home or shut down a business. A tight budget alone doesn’t clear the bar. The IRS will examine your full financial picture at the time payment was due, including liquid assets and borrowing capacity.
Reliance on Bad Advice
If you gave a qualified tax professional everything they needed and their mistake caused the late filing or wrong payment, the resulting penalty can be waived. The same goes for incorrect guidance you received directly from the IRS and reasonably relied on. You have to show your reliance was reasonable. Dumping unsorted records on a preparer and blaming them for a late return doesn’t qualify.
Penalties Reasonable Cause Won’t Remove
The estimated tax penalty is the most common one people try to abate this way and can’t. Standard reasonable cause does not apply to it.4Internal Revenue Service. Penalty Relief for Reasonable Cause
It has its own narrow exceptions instead. The IRS can waive it when a casualty, disaster, or other unusual circumstance would make the penalty inequitable, and there’s a separate exception for individuals who retired after reaching age 62 or became disabled during the tax year in question or the preceding year, where the underpayment was due to reasonable cause.6Office of the Law Revision Counsel. 26 USC 6654 – Failure by Individual To Pay Estimated Income Tax Outside those, the penalty stands.
How to Write the Request
Start with the IRS notice that assessed the penalty. The notice tells you the specific penalty, the tax period, and the amount, and you’ll need those details however you submit the request.
The formal vehicle is IRS Form 843, Claim for Refund and Request for Abatement. At the top, check the box for abatement of a penalty due to reasonable cause, and fill in your Social Security number, the type of tax, and the tax period.7Internal Revenue Service. Instructions for Form 843 Use a separate Form 843 for each tax year if you’re asking for relief on more than one.8Internal Revenue Service. IRS Form 843 – Claim for Refund and Request for Abatement If you already paid the penalty and want a refund, the same form covers that.9Internal Revenue Service. About Form 843, Claim for Refund and Request for Abatement
The written explanation is where the case is won or lost. The IRS wants to see what happened, when it happened, and how it prevented you from filing or paying on time.4Internal Revenue Service. Penalty Relief for Reasonable Cause Write it as a chronology. Show the dates of the event, show that it overlapped with the deadline, and describe what steps you took to try to comply despite it. “I was dealing with personal issues” tells the reviewer nothing. Specific dates and specific facts do the work.
Attach documents that match the timeline. Hospital admission and discharge records, death certificates, physician letters, insurance claims for property damage, police reports for theft, or correspondence from a tax professional whose mistake caused the problem. Put them in date order so the reviewer can line each one up against your narrative.
How to Submit It
By Phone
For some penalties, you can call the toll-free number on your notice and ask for relief on the call. Have the notice, the penalty, and your reasons ready before you dial. The representative may be able to approve relief during the call.2Internal Revenue Service. Penalty Relief Phone works especially well for First-Time Abate because the representative can verify your three-year history on the spot. If your situation is complex or leans on a stack of documents, put it in writing so you control how it’s presented.
By Mail
Send the completed Form 843, your written explanation, and your supporting documents to the service center address on your penalty notice. Use certified mail with return receipt requested. If anything goes missing, you’ll need proof that you sent it.
One thing to plan around: filing an abatement request does not pause IRS collection. If you owe a balance, notices and collection actions can keep coming while your request sits in the queue. If collection is a real concern, look separately at a collection hold or an installment agreement while the abatement is pending.
What Happens After You Submit
The IRS responds in writing. If it’s approved, the notice shows the penalty removed and the related interest reduced.2Internal Revenue Service. Penalty Relief If they need more, they’ll send a letter listing what’s missing and setting a deadline. Don’t let that letter sit. No response is treated as abandoning the request.
Processing times vary and can stretch out, especially during filing season. Plan on weeks to months rather than a fast turnaround. If you paid the penalty before requesting abatement and the request is approved, the IRS issues a refund for the amount removed.
Appealing a Denial
A denial isn’t the end. The rejection letter explains your right to appeal, and you generally have 30 days from the date of that letter to submit a written request for a conference with the IRS Independent Office of Appeals.10Internal Revenue Service. Penalty Appeal
You have to go through the written request process first. You can’t skip straight to Appeals without asking for the penalty to be removed and getting a formal denial. Your appeal should repeat your original facts and documents and add anything new that strengthens the case. If your first submission was thin, this is where you fix it.10Internal Revenue Service. Penalty Appeal
Read the rejection letter for the exact deadline, since it may not match the general 30-day guideline. If you miss it, you lose the right to an Appeals conference on that penalty.