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When Seeking Penalty Abatement, What Qualifies as Reasonable Cause?

If you are facing penalties from the IRS for paying or filing your taxes late, you have some options to get those assessments removed.  Reasonable cause is one method to getting penalty abatement.

Learn more about reasonable cause and how to qualify for it.

Key Insights We Will Discuss

  • What is reasonable cause?
  • How to qualify for reasonable cause

What Is Reasonable Cause?

Reasonable cause can be used when you have a legitimate excuse for not paying or filing your taxes on time.  When claiming reasonable cause, you must be able to prove that it was out of your control to file or pay on time and that you tried to file but it wasn’t possible.

According to the IRS, some examples of reasonable cause can include:

  • Death of a family member or loved one.
  • Unavoidable absence.  This can include being in jail or in rehab.
  • Your records were destroyed due to a fire, flood, or other reason.
  • There was a civil disturbance like a riot or a mail strike that prevented you from making a payment.
  • You received incorrect advice from a tax preparer who is normally considered competent.

The IRS adds that not having money to pay your taxes is not considered to be a reasonable cause.  However, the reason that led to your lack of funds may meet the criteria to qualify.

How Can You Qualify for Reasonable Cause?

If you are seeking penalty abatement by reasonable cause and don’t qualify for one of the reasons listed above, you can file a request with the IRS to consider your case.

When determining if you qualify for reasonable cause, the federal agency will consider the following information, according to the IRS Website:

  • What happened and when did it happen?
  • What facts and circumstances prevented you from filing your return or paying your taxes on time?
  • How did the facts and circumstances affect your ability to file and/or pay your taxes?
  • Once the facts and circumstances changed, what actions did you take to file or pay your taxes?
  • In the case of a Corporation, Estate or Trust, did the affected person or a member of the individual’s immediate family have the sole authority to execute the tax return or make the payment?

In addition to providing this information, you may also need to make certain documents available, including hospital or credit records, a letter from a physician, documentation of natural disasters, or other events.

When trying to qualify for reasonable cause, work with a tax attorney to determine if you have a case and what documents you should provide to the IRS.

Contact an Attorney

If you are seeking a penalty abatement by reasonable cause, call Ayar Law at 800.571.7175 to receive free, no-obligation tax advice from a qualified and experienced tax attorney.

Executive Summary:

  • You can try to qualify for reasonable cause when you are seeking a penalty abatement for paying or filing your taxes late.
  • You must prove to the IRS that you tried to file or pay your taxes and specific circumstances prevented it.
  • Contact Ayar Law to get free, no-obligation legal advice at 800.571.7175

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.