Did you face an emergency that caused you to file or pay the IRS late? If you have an IRS penalty on your hands, you can get a waiver. To do this, you must claim reasonable cause through an IRS penalty abatement reasonable cause letter .
You can technically either call the IRS to claim for reasonable cause. But I recommend writing an IRS penalty abatement reasonable cause letter, as it provides a record of your proposition and ensures that you craft your argument exactly how you want.
Remember that the IRS also offers penalty abatement for cases other than reasonable cause.
The example below provides just a standard format. The way you write it affects how persuasive it is. If you want your letter to be accepted, a tax expert can do wonders for your success rate. Curadebt’s professionals have years of experience dealing with the IRS and can help you get back on track with your taxes in no time.
Here is a simplified IRS letter template that you can use when writing to the IRS:
To: Internal Revenue Service
(use the address provided in your tax bill)
Re: Request for Penalty Abatement under Reasonable Cause
[Your Address]
[Your Social Security Number]
I am writing to request an abatement of penalties in the amount of $[X,XXX.XX] as assessed in the enclosed notice that is dated [MMM DD, YYYY].
I acknowledge and deeply apologize for my [late filing/late payment]. The reason was due to [a disaster, serious medical condition, death in the family, an inability to obtain the relevant documents.]
The sequence of events that led to my [late filing/ late payment] is as follows:
On [MMM DD, YYYY] [event]. As a result, [outcome of the event]
Please find the enclosed the documents enclosed that support my claim above:
[Document name]: [Proof that it provides]
Again, I sincerely apologize and hope that you will consider the abatement of penalties owed for reasonable cause. Please also consider that I besides this one oversight on my part, I have made all my other payments promptly.
I am willing to provide any clarifications that you may require. Please feel free to contact me at [XXX-XXX-XXX].
Here’s what reasonable cause refers to:
You have used all prudence to try and file or pay your taxes on time, but were unable to do so because of events outside of your control. In this case, you should argue for reasonable cause.
Examples of Reasonable Cause for late filing or payment can be grouped under four broad categories:
While these broad categories are helpful, the devil is in the details (as they say).
Many people are confused as to what makes up reasonable cause. For example, does breaking your arm constitute a physical illness? How much time can elapse between the event and your filing/payment deadline?
If you’re confused as to whether your circumstances would constitute reasonable cause, you could speak to a tax expert from Curadebt. They provide 100% FREE, no obligation consultations. Just one call can clear your doubts, so why wait?
Note the last point: you should have filed or paid your taxes by the time you write your penalty abatement letter to the IRS. By doing this, you create goodwill with the IRS. They’ll then be more likely to accept your reasons.
The IRS uses software called the Reasonable Care Assistant in evaluating whether a taxpayer is eligible for a first time penalty abatement.
Understanding how the Reasonable Care Assistant evaluates your situation can boost your chances of success. While the inner workings of the software are not widely known, some industry experts would be able to advise what it looks out for.
People have criticized the software for giving many incorrect results over the years. If the IRS rejects your penalty waiver application, a tax relief professional can persuade the IRS to amend their position.
In this article, I provided a sample letter for penalty abatement due to reasonable cause. You can certainly use this as a starting point for writing your letter.
However, your situation may not be as clear cut as the one we presented here. For example, how do you present and prove complex issues such as martial turbulence or a failure on the part of your tax preparer etc.?
You could always try to write the penalty abatement letter and see how the IRS responds. However, if the IRS rejects your letter, you’ll have to undergo an appeals process. If you’re like me, you’ll want to put your tax issues behind you as quickly and painlessly as possible.
There is no question: getting the help of a tax professional is the most painless way to get your tax issues resolved. Companies like Curadebt offer a FREE consultation. You only pay them if they can help you further. You really can’t do much better than Curadebt because they…