What is the IRS Penalty Abatement Form?

Anna Kuehl

Expert Contributor
Last Updated: December 9, 2021

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You could be eligible for one of three types of back tax penalty assistance: first-time abatement, reasonable cause, or statutory exception.
You can use IRS penalty abatement Form 843 to request most types of assistance.
You may be able to appeal a penalty abatement denial if necessary.

Filing your tax returns is rarely easy, and receiving one of over 150 possible Internal Revenue Service (IRS) penalties makes the process even harder and more expensive. Fortunately, receiving a penalty notice doesn’t necessarily mean the IRS has made a final decision. In many cases, you can apply for back tax assistance from steep fines through penalty abatement. Learn what the IRS penalty abatement form is and find out when and how to use it to request assistance.

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1 What Types of Tax Penalty Assistance Does the IRS Offer?

2 First-Time Penalty Abatement or Administrative Waiver

3 Reasonable Cause Relief

4 Statutory Exception Waiver

5 How to Use the IRS Penalty Abatement Form

6 When to Appeal a Penalty Abatement Decision

What Types of Tax Penalty Assistance Does the IRS Offer?

Although you can receive penalties for dozens of reasons, including errors and missed deadlines, the IRS only offers assistance for a few different infractions. Before you fill out the IRS penalty abatement form, assess whether you’re eligible for one of the three main types of tax penalty assistance.

First-Time Penalty Abatement or Administrative Waiver

While the IRS won’t exactly give you a pass for making a single mistake on your tax return, the agency does offer a special category of assistance for first-time offenders. You might be eligible for a First-Time Penalty Abatement if all of these statements apply to you:

You received an IRS penalty for failing to file or for neglecting to pay your taxes or your tax deposits on time.
You’ve never had to file a tax return before or you haven’t received a penalty for any of the returns you’ve filed in the three most recent tax years prior to incurring a penalty.
You’re up to date on filing your tax returns or requesting extensions for older returns.
You’ve already paid or set up a payment plan for outstanding taxes.

Reasonable Cause Relief

If you and your family have had a tough year due to circumstances beyond your control, you could also be eligible for penalty abatement. You might qualify for Reasonable Cause assistance if the following situations apply to you and your family:

The IRS has issued a penalty for failing to pay your taxes, neglecting to make a deposit, or never filing a return.
You’ve made every attempt to access the documents you need to file taxes, but you’ve been unable to get the records you need.
You’ve survived a fire or another natural disaster during the tax year.
You or your immediate family has experienced serious illness, death, incarceration, or other unavoidable absences.

To make a case for penalty assistance due to Reasonable Cause, you’ll need supporting documentation. Before requesting abatement, write down the timeline of events, gather relevant court records or hospital forms, and get documentation of any natural disasters.

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Statutory Exception Waiver

The IRS does occasionally make errors, and in some cases, those mistakes can cause you to receive penalties that you shouldn’t be responsible for paying. To find out if you qualify for a Statutory Exception waiver, you’ll need to have the following on hand:

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Your original written request for advice from the IRS
The incorrect written advice the IRS provided you and that you followed
Any documentation connecting the bad advice to the penalty you incurred

How to Use the IRS Penalty Abatement Form

If you’ve determined that you should be eligible for one of the three types of assistance, you’ll want to submit your IRS penalty abatement form right away. Follow these general guidelines to complete IRS Form 843 to the best of your ability:

Use separate forms for each issue. If you received multiple penalty notices or if your penalties span several tax years, you’ll need more than one Form 843.
Submit your penalty abatement form in a timely manner. In most cases, you have to file this form within three years of the tax return filing date or within two years of the payment date.
Make your case. Form 843 allows you to explain why you’re making a claim. Don’t hesitate to attach extra sheets to provide evidence if necessary.
File Form 843 yourself or designate someone to do it. If you don’t plan to file the request form personally, fill out Form 2848, which gives Power of Attorney and Declaration of Representative so someone you trust can complete the process for you.
Send the completed form to the right place. Once you’ve filled out and signed Form 843, mail it to the IRS service center that handled the tax return that incurred the penalty. Double check that the address is current before submitting the form.

When to Appeal a Penalty Abatement Decision

The IRS might not agree to remove your tax penalty the first time you make a request. If you receive a denial but you still believe that you’re eligible for penalty abatement, use the IRS’s penalty appeal process to move your request forward.

In many cases, you can use the online Penalty Appeal tool to get more information about the process. To use this tool, you must have submitted a written request for penalty abatement, gotten a denial from the IRS, and received a Notice of Disallowance in the mail. If you have additional questions after using the tool or if you need to talk to an examiner directly, call the IRS’s customer service line.

If you want to submit an appeal, keep in mind that you’ll have to do so within 30 days of receiving a denial from the IRS. To initiate the appeals process, you’ll have to file a formal written protest that includes your contact information, a statement requesting an appeal, a copy of the notices you’ve received, a list of the matters you disagree with, and reasons or facts that support your position.

If you don’t qualify for penalty abatement or you can’t pay your back taxes, we’re here to help. Contact the Solvable team today to get back tax assistance for owed amounts ranging from $7,500 to $100,000 or more.

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Anna Kuehl

Expert Contributor
Last Updated: December 9, 2021

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