July 13, 2024

What is a Reasonable Cause for IRS Penalty Abatement

In some cases, we fail to comply with tax legalities, like a delay in filing taxes or not paying the tax money promptly. Fret not; these are common occurrences. The IRS authority offers abatement on almost every penalty imposed by them. However, there are some logical causes that you have to get a hold of so that your tax filing will be smooth and less overwhelming.

Penalty abatement is the act of the IRS calling off any penalty imposed on you by the concerned authority. In the simplest terms, it can be called penalty relief. The extent of a penalty’s incurrence varies with the type and reason for the penalty. Here are some reasonable causes for IRS penalty abatement. It is essential to note that tax penalties can occur due to late filing, negligence in payment, or late deposition of the money for perusal.

  • Penalty abatement can be availed of by those who are afflicted by weather turbulence such as earthquakes, tornadoes, or any other natural disaster for that matter. This can be considered a valid reason for late payment.
  • Further, the untimely demise of an immediate family member or that person himself will ensure relief from the payment of taxes.
  • Technical glitches concerning system functioning that cause the money to be deposited at a later date or processed later than expected are considered logical unless there is negligence or forgery involved.
  • If a taxpayer was forbidden from accessing records that reveal the money to be deposited for reasons not known to him, that will make him eligible to apply for penalty abatement seamlessly.
  • Another eligible method for penalty abatement is showing a documented list of reasons for a failure to pay a tax that is legitimate and true to the matter. However, these reasons have to sound logical and should not be a twisting of facts.

Besides, you must also include the reasons for filing the taxes late in the application form. You can very well apply for the same with the help of a tax advisor who will guide the procedure. An IRS penalty abatement letter sample is provided below for a better understanding of the process.

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