Penalty Abatement FAQs
You may apply for penalty abatement by calling the toll free number on your notice letter. You can also fill out and mail in your application to the return address on your notice letter. However, it is in your best interest to consult a tax professional who has experience negotiating with the IRS to successfully achieve penalty abatement.
To apply for penalty abatement, you must first establish "reasonable cause" (see below). Generally, the IRS will request evidence of reasonable cause to assess the situation accurately.
For example, if your reasonable cause is an illness you must provide hospital records or a doctor's note as proof. Other documents you may need are court records and legal documentation of events. If you choose to work with a tax professional to resolve your penalties, your designated professional will let you know of any documents you will need.
As mentioned on our penalty abatement resource page, the IRS accepts a variety of reasonable causes. Each taxpayer's situation is unique, and therefore, the reasonable causes will depend on the individual's finance and circumstances. Keep in mind that insufficient funds are NOT considered reasonable cause for failure to pay or file.
The IRS does NOT forgive interest. However, they will forgive penalties and interest accrued on said penalties.
The IRS will come after you if you choose to ignore your tax obligations. Individuals who refuse to pay back the funds owed for penalties will face various problems, including enforcement action and federal tax liens..
The IRS must accurately assess the details of every case, which can be time-consuming. The length of time for penalty abatement determination can vary from 30 days to six months.
The IRS can deny your application to penalty abatement for many reasons. However, you may appeal the IRS' denial and reapply.