To write a letter requesting abatement of IRS penalties, clearly state your identifying information, the specific penalties, and provide a detailed, honest explanation of the "reasonable cause" (e.g., illness, disaster, death) that caused the failure to comply, supported by documentation. The letter should be sent along with IRS Form 843 to the address on your notice.
A first-time penalty abatement letter typically contains:
In some cases, penalties can be resolved informally by calling the IRS at the number listed on the penalty notice (typically 1-800-829-1040 for individuals or 1-800-829-4933 for businesses). Explain your situation and request abatement.
Good reasons for IRS penalty abatement focus on "Reasonable Cause" (unforeseen events/hardship) or "First-Time Abatement" (clean compliance), including serious illness/death, natural disasters, inability to get records, unavoidable absence, reliance on bad professional advice, or technical system issues, all showing you tried to comply but couldn't due to circumstances beyond your control.
Your letter should include the IRS's address, a subject line, your personal information, date, and salutation. Start by placing the IRS's address along with the tax period, tax form, and subject on top of your letter. Next, include your contact information below the first block.
Mail or fax the completed IRS Form 4506-T to the address (or FAX number) provided on page 2 of Form 4506-T. If the 4506-T information is successfully validated, tax filers can expect to receive a paper IRS Verification of Non-filing Letter at the address provided on their request within 5 to 10 days.
To write an effective explanation letter, use a professional format, clearly state your purpose, provide relevant details, describe your circumstances, include a call to action, and proofread your letter.
Successful tax abatements often involve revitalizing areas, creating jobs, and encouraging development, seen in examples like New York City's 421-a program converting commercial buildings to housing, Cleveland's residential abatements boosting renovations, and St. Lucie County's performance-based incentives for high-wage jobs, all leading to growth or preservation of housing stock. Key successes include spurring major investments, increasing housing supply (sometimes with affordability clauses), and revitalizing declining neighborhoods by offsetting high development costs.
Dear Mr.
I hope this letter finds you well. I am writing to kindly request a waiver for certain financial penalties incurred on my account due to the late payment of my credit card bill. I apologize for any inconvenience caused and assure you that this delay was an unfortunate oversight on my part.
Write a letter stating you are appealing a penalty abatement denial. Include a copy of your IRS denial notice. Provide any documentation or explanations you want the Independent Office of Appeals to consider. Send your appeal request to the address listed on your denial letter before the deadline.
Write a letter requesting reasonable cause abatement, or send Form 843, Claim for Refund and Request for Abatement. The IRS decision usually takes about three to four months.
We may be able to remove or reduce some penalties if you acted in good faith and can show reasonable cause for why you weren't able to meet your tax obligations. By law we cannot remove or reduce interest unless the penalty is removed or reduced. For more information, see penalty relief.
You may qualify for penalty relief if you demonstrate that you exercised ordinary care and prudence and were nevertheless unable to file your return or pay your taxes on time. Examples of valid reasons for failing to file or pay on time may include: Fires, natural disasters or civil disturbances.
To qualify for IRS "forgiveness" (like an Offer in Compromise or Fresh Start payment plan), you generally need to owe tax debt, be current on tax filings, demonstrate financial hardship preventing full payment, and have a generally compliant tax history, with specific programs like streamlined installment agreements capping debt at $50,000. True forgiveness (an Offer in Compromise) is rare and depends on proving you can't pay or that the IRS's collection is unlikely, while other programs offer payment plans.
You can settle back taxes by setting up a payment plan, applying for hardship status, or requesting a reduced settlement if you qualify. The IRS will ask for details about your income, expenses, and assets. You'll need to file all missing tax returns before they agree to any settlement.
IRS Penalty Abatement Request Letter
Sample Letter to the IRS
Penalty abatement is a waiver or reduction of tax fine fees. If you fail to file your return on time, do not make a payment, or encounter another tax filing error, you'll receive a fine for the action. However, in select cases, the IRS may provide charge abatement, eliminating or minimizing your fees.
Use Form 843 to claim a refund or request an abatement of certain taxes, interest, penalties, fees, and additions to tax.
Reasonable cause abatement is a provision that allows taxpayers to request the removal of certain penalties based on circumstances that prevented the taxpayer from complying with tax laws.
The penalty abatement program can reduce or remove a penalty—though not your tax liability —if you meet all of these criteria:
The IRS mails letters or notices to taxpayers for a variety of reasons including:
In your formal protest, include a statement that you want to appeal the changes proposed by the IRS and include all of the following: ∎ Your name, address, and a daytime telephone number. ∎ List of all disputed issues, tax periods or years involved, proposed changes, and reasons you disagree with each issue.