What to Do to Abate Penalties

If you have IRS tax debt, you more than likely cannot pay it, as well as the penalties and interest that were automatically added on top of it by the IRS computer system. Depending on the personal situation, there are options around this IRS issue.

Reasonable Cause

When a taxpayer shows reasonable cause, meaning he practices prudence and care in determining his obligation but is unable to comply with them, the IRS can abate or lessen penalties.

To show reasonable cause, you need to be able to prove to the IRS by legal and logical means that you tried to pay your taxes on time but was prevented by circumstance.

The cases that the IRS accepts as reasonable cause are:

• Ignorance of the law
• A mistake was committed
• Forgetfulness
• Serious sickness, death, or unavoidable absence
• Inability to obtain records
• Tax professional gave erroneous advice
• The IRS gave erroneous advice
• Fire, casualty, natural disaster, other disturbance
• Acts of God

Any reason is satisfactory as long as you were prudent and careful in addressing your obligation but was unable to comply.

Requesting a Penalty Abatement

By writing your own letter or filling out a Form 843, also known as Claim for Refund and Request for Abatement, and including documentation that support your reasonable cause, you can request for an abatement immediately if you get a tax bill that has penalties. If you include payment, attach a note specifying that it's for the tax, not for penalties and interest, and note this on the check itself. You might get more bills before you receive a response, so make duplicats of the request.

Take note that if your penalty abatement request is denied, you will not be able to send another request with the same reason.

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Originally posted 2008-01-14 04:33:45. Republished by Blog Post Promoter

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