- Review the denial notice or letter received from the IRS and follow its direction to see Penalty appeal eligibility for next steps.
- Submit Form 843 with a full explanation of facts and circumstances plus supporting documentation if penalty relief was not approved.
- Pay what you can now and apply for a payment plan to help reduce future penalties.
- Interest on any remaining penalties continues to accrue until the balance is paid in full.
For background on this issue, read our Penalty relief guide.
IRS Penalty Relief Basics
The IRS may remove or reduce certain penalties when a taxpayer shows reasonable cause and acted in good faith. Reasonable cause is evaluated case by case using all facts and circumstances and varies by penalty type.
Eligible penalties include failure to file, failure to pay, accuracy-related penalties, and information return penalties. Reasonable cause generally does not apply to the estimated tax penalty.
For failure-to-file or pay penalties, the IRS considers whether ordinary care and prudence were exercised despite inability to meet the deadline. Examples of qualifying events include fires, natural disasters, death or serious illness, or certain system issues that prevented timely electronic filing or payment.
Accuracy-related penalties may be relieved if the taxpayer made efforts to report the correct tax, considered the complexity of the issue, their education and knowledge, and steps taken to understand the obligation or obtain competent advice.
After a Denial
If the IRS denies a request for penalty relief, the notice or letter instructs the recipient to see Penalty appeal eligibility for next steps.
Taxpayers who cannot resolve the penalty over the phone may request relief in writing using Form 843, Claim for Refund and Request for Abatement. The written request must explain the facts and circumstances, including what happened and when, how the situation prevented timely compliance, and what attempts were made to file or pay on time.
Supporting documentation should be included, such as hospital or court records, doctor's letters with dates, disaster documentation, or copies of relevant correspondence.
Republic Tax Relief provides private tax-resolution services for individuals and businesses facing IRS or state tax issues. The firm offers a free, no-obligation initial consultation to evaluate whether its services may be suitable for communicating with the IRS about unresolved tax matters.
Payment Plans and Interest
If the full tax or penalty amount cannot be paid on time, the IRS advises paying what you can immediately and applying for a payment plan. Setting up a plan may reduce future penalties.
Interest continues to be charged on penalties until the balance is paid in full. The IRS automatically reduces or removes related interest when it reduces or removes the associated penalties.
IRS guidance checked .
General information only, not individual tax, legal, or financial advice. Rules, deadlines, and eligibility depend on your circumstances. Check current official guidance or consult a qualified professional.
Request a correction →
