Penalty Abatement

If there is a ‘rational cause’ for reduction or adjustment, the IRS may be prepared to review the fines which created a tax liability. Reasonable cause can include:

  • Sending the tax return or payment on time but putting the incorrect address on the envelope; using the wrong value of postage
  • Death or illness in the family
  • A mistake caused by an IRS employee
  • The removal of records by a fire, flood or other catastrophes

The IRS eventually removes about one-third of tax penalties through successful tax resolution. To petition that a tax penalty is removed or restored you need to fill out IRS Form 843.