Before you write
Correct the account first. IRM 20.1.1.3 tells employees not to consider relief until the module has been analyzed and corrected: missing payments, an extension that did not post, a tax adjustment. Its example is a failure-to-pay penalty that disappeared once a timely payment, misapplied to another module, was moved; the penalty reversed systemically and no relief request was needed. Pull the account transcript and compare every payment and extension with the client's records (see reading an account transcript).
Identify the penalty. IRC 6751(a) requires each penalty notice to include the name of the penalty, the Code section, and a computation. The Code section matters because the relief standard changes by penalty (see reasonable cause by penalty), and Form 843 line 6 asks for it.
Work through the relief order. The IRS considers relief in this order: correction of IRS error, statutory and regulatory exceptions, administrative waivers, reasonable cause (IRM 20.1.1.3). For failure to file, pay or deposit, check First Time Abate before drafting a reasonable cause narrative; the IRS will apply it first anyway. For accuracy-related penalties, check whether a statutory exception (substantial authority, adequate disclosure) reduces the underpayment.
Confirm authorization. The IRS accepts information from a representative without a power of attorney but cannot discuss the account. A Form 2848 on file lets you follow up and receive the decision.
Choosing the channel
| Channel | When it fits | Limits |
|---|---|---|
| Phone | Failure to file, pay or deposit penalties; FTA requests | Oral reasonable cause requests are allowed only up to oral statement thresholds the public IRM redacts. FTA has no threshold. See abatement by phone. |
| Letter to the notice address | Any assessed penalty, especially above the oral thresholds | Must be signed; for FTF/FTP relief, include the penalties of perjury declaration. |
| Form 843 | Penalty already paid (refund claim), or a formal record is wanted | One form per tax period and type of tax, with exceptions. See Form 843. |
| During an exam | Accuracy-related or other penalties proposed before assessment | Raise defenses with the examiner; disputes go to Appeals with the deficiency. See formal protest. |
IRM 20.1.1.3.1 requires a written statement “signed under the penalty of perjury” for all penalties other than failure to file, failure to pay and failure to deposit, naming TIN penalties, information return penalties and penalties assessed by a compliance program as examples. After assessment, the IRM says the request must be in writing, and employees are told to ask callers to put an oral request in writing (IRM 20.1.1.4.1.2).
Paid penalties. A claim for refund of a penalty “generally must be filed within three years after the return was filed or within two years after the penalty was paid, whichever is later”, with refunds limited to amounts paid in the applicable period (IRM 20.1.2.2.4). See refund claims for paid penalties.
Structure of the request
- Heading. Taxpayer name, TIN, address; tax form and tax period; notice number and date. On Form 843 this is lines 1 to 6.
- The request in one sentence. Which penalties, by name and Code section, and the amount. IRM 20.1.1.3.5(4) says “if the taxpayer specifically requests relief from only one penalty, then only that one penalty should be considered,” so name every penalty you want reviewed.
- The ground for relief, in IRS order. IRS error with proof; then any statutory exception; then FTA, based on a clean compliance history for the three preceding years; then reasonable cause.
- The facts, dated. The IRM says “The dates and explanations should clearly correspond with events on which the penalties are based.” Lay out what happened, when, how it prevented compliance, how the client handled other affairs, and when and how the client complied once able.
- The standard applied. One paragraph tying the facts to the standard for that penalty, citing the IRM subsection for the reason (for example IRM 20.1.1.3.2.2.1 for serious illness) and the regulation (Treas. Reg. 301.6651-1(c) or 1.6664-4).
- Attachments list. Each document, and what date or fact it proves.
- Declaration and signature. A penalties of perjury declaration signed by the taxpayer for FTF and FTP relief (Treas. Reg. 301.6651-1(c)(1)); both spouses sign a Form 843 on a joint return, and a corporate officer signs for a corporation (Form 843 instructions).
Templates: reasonable cause letter and FTA request letter.
Evidence and signatures
The IRM's lists of “information to consider” for each reason are effectively the evidence checklist. For death or illness: relationship, dates, duration and severity, and whether tax duties were attended to promptly afterward. For unavailable records: why the records were needed, what was done to get them, why the client did not estimate, and copies of letters written and responses received (IRM 20.1.1.3.2.2.1 and 20.1.1.3.2.2.3). For undue hardship: bank statements and other means explored to get funds (IRM 20.1.1.3.3.3).
A faxed statement with a signature may be considered when a signed statement is needed to continue a review (IRM 20.1.1.3.1).
How the IRS reviews it
IRM 20.1.1.3.5 tells the employee to check first whether relief can be considered at all or belongs to another function (certain freeze codes route the case elsewhere), then to evaluate the events and parties, the care-and-prudence test and other relief criteria. Points from that section that shape the request:
- “The burden of proving entitlement to relief is generally upon the taxpayer.”
- The employee checks at least three years or twelve quarters of history, and the same penalty in the history may count against the client.
- The employee asks for more information if dates and explanations do not match, but checks FTA before doing so.
- For penalties asserted by compliance personnel, the reviewing employee contacts that office first to decide whether the case should go back to it (IRM 20.1.1.3.5.2).
For campus reasonable cause requests on failure to file and pay (individuals) and deposit penalties, employees use the Reasonable Cause Assistant software (IRM 20.1.1.3.6), which steps through the same questions.
After the decision
Granted. The IRS abates the penalty and the interest on it (IRM 20.1.2.2.4). If relief came from FTA, the letter says so.
Denied. The employee must give written notice of the decision and appeal rights, including “A complete explanation of the IRS’s decision and the basis for denial” (IRM 20.1.1.3.5.3). Campuses generally use Letter 854C. Options then:
| Situation | What the IRM says happens |
|---|---|
| New information that meets the criteria | Penalty abated |
| New information that does not, no appeal requested | Taxpayer told relief cannot be granted and referred to the original denial letter |
| New information that does not, appeal requested | Case transferred to Appeals |
| No new information, appeal requested | Case transferred to Appeals |
| No new information, no appeal requested | Request cannot be considered |
Source: IRM 20.1.1.3.5.1. Appeals reviews a penalty only after an employee has denied relief and the taxpayer asks, and it can settle on hazards of litigation (IRM 20.1.1.4.1). One exception: post-assessment requests to abate accuracy-related penalties under IRC 6662 and 6662A “are not forwarded to Appeals”; the denial letter points the taxpayer to paying and filing a Form 843 refund claim (IRM 20.1.5.5). See appealing a denial.
Appealing does not stop interest. IRM 20.1.2.2.4 says only payment of the penalty stops interest accruing during the appeal, and that if the penalty is later abated, the interest charged on it is abated too.
Common mistakes
- Arguing reasonable cause before checking for an unposted payment or extension.
- Asking about one penalty when the module carries several.
- Dates that do not line up with the due date or the period of noncompliance.
- Explaining the event but not why the client could not file or pay once it ended.
- Relying on a preparer who forgot to file or pay, without more.
- Omitting the penalties of perjury declaration or the client's signature.
- Sending the same facts again after a denial without asking for Appeals.
Transition to Automatic Exemption from Penalty. The IRS First Time Abate page (reviewed October 2026) says FTA “is transitioning to a new relief called Automatic Exemption from Penalty (AEP), starting Summer 2026”. For Forms 1040, 1065 and 1120, Forms 940 through 945 and Form CT-1, beginning with 2025 tax year returns and 2026 quarterly returns, AEP is applied when the original return completes processing: with three prior years (or 12 consecutive quarters) of timely filing and payment, “The IRS won’t assess penalties for failure to file, failure to pay, or failure to make a deposit” and sends a letter saying the relief was applied; “You don’t need to contact the IRS or respond to the notice.” FTA continues to apply to earlier periods and to returns AEP does not cover, and the page says to contact the IRS if a penalty was assessed that should have qualified. See First Time Abate.
Questions practitioners ask
Should I use Form 843 or a letter?
Either works for an assessed penalty. Form 843 is the standard vehicle when the penalty has been paid, because the request is also a refund claim subject to the IRC 6511 periods. A letter to the notice address is common for unpaid penalties. Both need a signature.
Where do I send a penalty abatement request?
When responding to a notice, the Form 843 instructions say to use the return address on the notice. Otherwise, for penalties, send it to the service center where the client would file a current-year return for that tax.
Can I request abatement before the penalty is assessed?
Yes. IRM 20.1.1.3.5 says the initial request may come during or after an examination but before assessment, with a late return, or after assessment. Relief granted before assessment is applied by suppressing the penalty.
How specific does the request need to be?
Name each penalty and period. The IRM says that if a taxpayer asks for relief from only one penalty, only that one is considered, and the explanation must address each penalty because each is a different failure.
What if the IRS denies the request and I disagree?
Ask for an appeal in writing, signed by the taxpayer or a representative with a Form 2848. The IRM transfers the case to Appeals. For accuracy-related penalties after assessment, the route is payment and a refund claim instead.
Does interest keep running while a request or appeal is pending?
Yes, on an unpaid penalty. IRM 20.1.2.2.4 says only payment of the penalty prevents continued accrual of interest during the appeals process, and that if the penalty is abated, all interest charged on it is abated as well.