Reasonable cause: asking the IRS to remove a penalty

Most IRS penalties can be removed if there was a good reason for the failure. Knowing what the IRS accepts, and how to present the facts, makes the difference between a quick approval and a denial. This guide explains how reasonable cause works.

By Hamza Fida, Chartered Accountant. Reviewed by Muhammad Bilal, Chartered Accountant. Checked against official sources on . 3 minute read.

Short answer

Reasonable cause penalty abatement removes a penalty if you used ordinary business care but still could not file or pay on time, because of circumstances such as serious illness, a death in the family, a disaster or records you could not obtain. Lack of money or relying on someone else to file usually is not enough. Request it by phone, letter or Form 843, with evidence.

At a glance

Standard
Ordinary business care and prudence
Accepted causes
Serious illness, death, disaster, unobtainable records
Usually rejected
Lack of funds alone, relying on someone else to file
Applies to
Failure to file, pay and deposit penalties, and others
How
Phone, letter or Form 843
Try first
First-time abatement, if eligible
Reasonable cause: asking the IRS to remove a penaltySteps: 1. Check first-time abatement; 2. Build a timeline; 3. Gather evidence; 4. Make the request; 5. Appeal if denied.THE PROCESS AT A GLANCEReasonable cause: asking the IRS to remove apenalty1Check first-timeabatementOften simpler if youhave a clean three-yearhistory2Build a timelineDates of the event, thedeadline, and when youcomplied3Gather evidenceMedical letters, deathcertificates, insuranceclaims, correspondence4Make the requestBy phone for smallerpenalties, or inwriting or on Form 8435Appeal if deniedThrough the IRSIndependent Office ofAppealsChecked against official sourcesTax BakersReasonable cause: asking the IRS to remove a penaltySteps: 1. Check first-time abatement; 2. Build a timeline; 3. Gather evidence; 4. Make the request; 5. Appeal if denied.THE PROCESS AT A GLANCEReasonable cause: asking the IRSto remove a penalty1Check first-time abatementOften simpler if you have a clean three-yearhistory2Build a timelineDates of the event, the deadline, and whenyou complied3Gather evidenceMedical letters, death certificates,insurance claims, correspondence4Make the requestBy phone for smaller penalties, or inwriting or on Form 8435Appeal if deniedThrough the IRS Independent Office ofAppealsChecked against official sourcesTax Bakers
The process at a glance: 1. Check first-time abatement; 2. Build a timeline; 3. Gather evidence; 4. Make the request; 5. Appeal if denied.

What does the IRS look for?

Facts showing that you exercised ordinary business care and prudence but were still unable to comply, and that you complied as soon as the circumstances ended. The IRS considers what happened, when, how it prevented compliance, and what you did once you could act.

Each penalty and each period is considered separately.

Which reasons are usually accepted?

Usually acceptedUsually rejected
Serious illness or incapacity of the taxpayer or close familyLack of funds, on its own
Death in the immediate familyRelying on an accountant or agent to file on time
Fire, flood or other disasterForgetting, or being too busy
Inability to obtain records despite tryingNot knowing about the requirement, in most cases
Reliance on written advice from the IRSMistakes by the taxpayer
Reliance on a tax professional's advice on a substantive question

Lack of funds can support relief from a failure to pay penalty if you show you tried to pay and the shortfall came from circumstances beyond your control.

How do you request it?

  1. Check first-time abatement

    Often simpler if you have a clean three-year history. See first-time penalty abatement.

  2. Build a timeline

    Dates of the event, the deadline, and when you complied.

  3. Gather evidence

    Medical letters, death certificates, insurance claims, correspondence.

  4. Make the request

    By phone for smaller penalties, or in writing or on Form 843.

  5. Appeal if denied

    Through the IRS Independent Office of Appeals.

What does a strong request look like?

A business owner was hospitalized from February to May and the partnership return due March 15 was filed in June, two weeks after discharge. The request gives the dates of admission and discharge, explains that no one else could sign or complete the return, notes the return was filed promptly afterwards, and attaches a letter from the hospital. The timeline shows the illness caused the delay and that the owner acted as soon as possible, which is what the IRS looks for.

What if the request is denied?

Ask for the reason in writing, then appeal through the IRS Independent Office of Appeals, adding any evidence the first reviewer did not have. Many denials turn on a missing date or document rather than the merits.

Which penalties does it cover?

Failure to file, failure to pay and failure to deposit penalties, information return penalties and many others, including penalties for late Form 5472 and other international information returns, as explained in late Form 5472 penalty relief, where reasonable cause is often the main defense. The estimated tax penalty generally has its own narrower waiver rules for casualty, disaster or retirement and disability. See the underpayment penalty.

What should a written request include?

Your name, taxpayer number, the tax form, period and penalty; a short factual account of what happened and how it prevented compliance; the dates; what you did to comply once possible; and copies of supporting documents. Keep it brief and factual. See how to respond to an IRS notice.

Is interest removed too?

Interest on a removed penalty is reduced along with the penalty. Interest on the tax itself generally stays, because it is a charge for the use of the money, not a penalty.

Facing an IRS penalty?

We check whether first-time abatement or reasonable cause applies, prepare the request with evidence, and appeal if it is denied.

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Questions people ask

What counts as reasonable cause for IRS penalty abatement?

Circumstances beyond your control despite ordinary care, such as serious illness, a death in the family, a disaster or records you could not obtain.

Is lack of money reasonable cause?

Not on its own, though it can support relief from a failure to pay penalty in some circumstances.

Can I get a penalty removed because my accountant filed late?

Generally not. Relying on an agent to file on time is usually not reasonable cause.

How do I request reasonable cause relief?

By phone, letter or Form 843, with a timeline and supporting evidence.

Sources

Every fee, date and rule on this page was taken from these official and primary sources.

  1. IRS: Penalty relief for reasonable cause
  2. IRS: About Form 843
  3. IRS: Penalty relief

Rules and fees change. If you are reading this long after October 1, 2026, confirm the figures with the source before you rely on them.

Deadlines, penalties and IRS noticesFirst-time penalty abatement: who qualifies and how to askDeadlines, penalties and IRS noticesHow to read an IRS notice and respond on timeDeadlines, penalties and IRS noticesLate Form 5472: the penalty and how to ask for relief

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This guide is general information. It is not tax or legal advice for your situation.