Reasonable cause: what the courts accept, what they reject, and how to document a claim

Reasonable cause is decided on facts, and the facts that persuade a court are a short list. This guide is built from a dataset of 303 decisions on reasonable cause penalty relief decided between 1985 and 2026, searchable in the case finder. Each part states the rule the courts apply, lists decisions that show it in operation, and links to the finder with that filter already set. The IRS’s own framework, IRM 20.1.1.3.2, is on reasonable cause: what the IRS accepts; the administrative waiver that comes first is on First Time Abate.

Two rules frame everything below. The taxpayer must raise and prove reasonable cause: under IRC 7491(c) the Commissioner produces evidence that the penalty applies, and then, as the Tax Court put it in Higbee, 116 T.C. 438 (2001), “it is the taxpayer’s responsibility (and not the Secretary’s obligation) to raise those issues.” And the standard is the same words in every penalty that allows the defense: ordinary business care and prudence (Treas. Reg. 301.6651-1(c)(1)), applied to the taxpayer’s own conduct.

1. Boyle and the non-delegable duty to file

United States v. Boyle, 469 U.S. 241 (1985), is the starting point for every late-filing case. An executor hired an experienced attorney, asked about the deadline, and was told the return was being handled; the attorney missed it. The Supreme Court held that the duty to file on time is the taxpayer’s own, that a deadline is a ministerial matter which needs no expertise, and that relying on an agent to meet it is not reasonable cause: “Ordinary business care and prudence” do not demand such actions, the Court said of second-guessing substantive advice, but they do demand that the taxpayer know the date and see that the return is filed. The line Boyle drew, agent versus adviser, is the line the courts still draw. Four decades on, the dataset shows the failure-to-file addition surviving reasonable cause in 136 of 166 decisions.

• denied
  United States v. Boyle469 U.S. 241 (1985) · Supreme CourtReliance on an attorney to file the estate tax return was not reasonable cause; the deadline is the taxpayer’s responsibility, however competent the agent.
• denied
  Specht v. United States661 F. App'x 357 (6th Cir. 2016) (unpublished) · Court of AppealsAn elderly executor who relied on an attorney later found to have brain cancer lost: “the duties to file a tax return and pay taxes are non-delegable and mere good-faith reliance does not constitute reasonable cause.”
• denied
  Intress v. United States404 F. Supp. 3d 1174 (M.D. Tenn. 2019) · District CourtBoyle applies to e-filing: reliance on a preparer to transmit the return is reliance on an agent, and the IRM’s First Time Abate policy creates no enforceable right.
• denied
  Vica Technologies, LLC v. CommissionerT.C. Summary Opinion 2019-7 · Docket recordAn LLC that relied on its accountant to file the Form 1065 on time had no reasonable cause under Boyle; summary judgment for the Commissioner in a lien case.
• denied
  McNair Eye Center, Inc. v. CommissionerT.C. Memo. 2010-81 · Docket recordAn eye clinic that left Forms 941 and deposits to its CPA could not show reasonable cause; the case went back to Appeals only on collection alternatives.
• denied
  Bonomo v. United StatesNo. 24-cv-80199 (S.D. Fla. Feb. 13, 2025) (report and recommendation) · District CourtReliance on an accountant to file Form 3520-A, without more, was not reasonable cause for the IRC 6677 penalty.

Open the finder: reliance on an adviser, failure to file

2. Reliance on an adviser: when it works

Boyle left the door open for reliance on substantive advice, and Treas. Reg. 1.6664-4(c) says when it counts for the accuracy-related penalty. The Tax Court’s test comes from Neonatology Associates, 115 T.C. 43 (2000), and has three parts: the adviser was a competent professional with enough expertise to justify reliance; the taxpayer gave the adviser necessary and accurate information; and the taxpayer actually relied in good faith on the adviser’s judgment. In the dataset this is the only excuse with a real win rate: of 170 decisions tagged reliance, 21 were won outright and 27 in part, almost all of them accuracy-related penalty cases on a debatable return position. The losing patterns are just as consistent: advice about a deadline or an extension (nonsubstantive, so Boyle governs), an adviser who promoted or structured the transaction, a preparer who was never told about the income, and a return the taxpayer signed without reading when a glance would have shown the error.

• denied
  Neonatology Associates, P.A. v. Commissioner115 T.C. 43 (2000), aff'd, 299 F.3d 221 (3d Cir. 2002) · Docket recordSource of the three-part test; participants who relied on the insurance salesmen promoting the VEBA arrangements did not meet it.
• granted
  Michael J. Rogerson v. CommissionerT.C. Memo. 2022-49 · Docket recordA business owner who relied on his CPA’s advice on passive activity grouping, a reasonably debatable question, had reasonable cause and good faith; no IRC 6662 penalty.
• granted
  Grecian Magnesite Mining, Industrial & Shipping Co., SA v. Commissioner149 T.C. No. 3 · 2017 · Docket recordA foreign corporation that followed a competent adviser’s advice on a debatable FIRPTA question had reasonable cause for not reporting the gain, not filing and not paying.
• denied
  Knappe v. United States713 F.3d 1164 (9th Cir. 2013) · Court of AppealsAn executor who relied on his accountant’s wrong advice about the length of an extension lost; advice about a nonsubstantive matter such as the deadline is not the advice Boyle protects.
• denied
  Canal Corporation and Subsidiaries, formerly Chesapeake Corporation and Subsidiaries v. Commissioner135 T.C. No. 9 · 2010 · Docket recordA corporation could not rely on an opinion from the firm that structured the deal for a contingent fee: “Independence of advisers is sacrosanct to good faith reliance.”
• denied
  Stephen G. Woodsum & Anne R. Lovett v. Commissioner136 T.C. No. 29 · 2011 · Docket recordTaxpayers who knew of a $3.4 million income item on a Form 1099 could not blame the preparer for leaving it off; a preparer’s omission is not advice under the regulation.

Open the finder: reliance on an adviser, accuracy-related penalty

3. Illness, death and incapacity

IRM 20.1.1.3.2.2.1 accepts death, serious illness or unavoidable absence of the taxpayer or an immediate family member, and the courts accept it in principle. In practice the defense fails unless two things are shown: the incapacity covered the period when the return or payment was due, and it actually prevented compliance. Courts ask whether the taxpayer kept running a business, handled other affairs, or filed other years during the same period; if so, the illness was a burden, not an incapacity. The timing point cuts both ways: an illness that began after the due date does not explain the failure, and a taxpayer whose illness lifts must file promptly afterwards. The dataset has 34 decisions tagged illness or death and 9 tagged mental capacity; 2 were won outright and 4 in part.

• denied
  Roger S. & Lisa G. Campbell v. CommissionerT.C. Memo. 2011-42 · Docket recordA daughter’s severe illness and a birth around the due date did not excuse the late return where the taxpayers could attend to other affairs; illness excuses only when it causes an inability to file.
• denied
  George Anton Remisovsky & Ellen Jones-Remisovsky v. CommissionerT.C. Memo. 2022-89 · Docket recordAlcoholism and depression were not reasonable cause for a taxpayer who kept performing his regular business duties; the incapacity must be so severe that it prevents filing.
• denied
  John J. McLaine v. Commissioner138 T.C. No. 10 · 2012 · Docket recordAlcoholism did not excuse failure to pay where the taxpayer ran his consulting business and was not incapacitated on the due date; a very difficult financial situation alone was not enough either.
• granted
  Donald S. Tracy v. CommissionerT.C. Summary Opinion 2023-20 · Docket recordAn elderly solo lawyer in poor health had systems that failed only because he could no longer supervise his assistant; the employment tax additions were abated.
• partial
  Walter L. & Carol L. Selph v. CommissionerT.C. Summary Opinion 2010-20 · Docket recordA wife’s serious health problems were reasonable cause for the 2000 and 2001 returns but not for 1999, where the timing did not match.
• denied
  Hunter Maintenance & Leasing Corp. v. United StatesNo. 18 C 6585 (N.D. Ill. Feb. 25, 2020) · District CourtAn S corporation whose CEO and CFO were dying of cancer did not show reasonable cause, because the corporation itself was not disabled: it had other officers and an accountant.

Open the finder: illness or death

4. Lost or unavailable records

IRM 20.1.1.3.2.2.3 asks why the records were unavailable, what the taxpayer did to get them, and whether the return could have been filed from other information. The courts ask the same questions and add one more: a taxpayer who is missing a Schedule K-1 or a Form W-2 should estimate, file and amend, rather than wait. Records destroyed by an event outside the taxpayer’s control, with a reconstruction effort to show for it, is the fact pattern that wins; records that were never kept is the fact pattern behind most accuracy-related losses in this group. Of 19 decisions, 1 was won outright and 3 in part.

• partial
  Christopher W. Johnson, Jr. v. CommissionerT.C. Memo. 2012-231 · Docket recordDestruction of records by Hurricane Katrina was reasonable cause for the late 2005 return; the accuracy-related penalties on the disallowed deductions stood.
• denied
  James E. Philbrick v. CommissionerT.C. Memo. 2016-64 · Docket recordNo reasonable cause for a late return or unsubstantiated Schedule C expenses; the court contrasted cases where lost records plus a reconstruction effort supported relief.
• denied
  Merrill C. Roberts v. CommissionerT.C. Memo. 2014-74 · Docket recordRecords burned by a former girlfriend and preoccupation with audits of earlier years did not excuse the late return.
• denied
  Randall C. & Leslie A. Whitney v. CommissionerT.C. Summary Opinion 2011-106 · Docket recordA third party’s failure to send a Schedule K-1 did not excuse a late return; the taxpayer should have filed with the available information and amended.
• denied
  Reginald Sampson & Gervel S. Sampson a.k.a. Gervel S. Jones v. CommissionerT.C. Memo. 2013-212 · Docket recordTaxpayers who left corporate income off their return because records were incomplete did not act with reasonable cause; they should have estimated and reported it.
• partial
  Brenda K. Smiling & A. Mark Smiling v. CommissionerT.C. Memo. 2017-196 · Docket recordCredible testimony from the taxpayer, his accountant and his attorney showed reasonable cause and good faith for a legal fee deduction even though the amounts were not substantiated at trial.

Open the finder: records lost or unavailable

5. E-file and mailing failures

Mandatory e-filing did not change Boyle. A preparer who transmits the return is an agent, and the courts that have decided the point hold that reliance on the preparer to e-file is not reasonable cause. The Fifth Circuit in Haynes declined to decide it and sent the case back because the taxpayers’ own diligence after the rejection was disputed; that is the opening, and it is narrow: what did the taxpayer do to confirm acceptance? For paper returns the question is proof of mailing. IRC 7502 and Treas. Reg. 301.7502-1 make a postmark or registered or certified mail receipt the proof; credible testimony has carried the day in a summary opinion, but it is not something to plan on. The extension cases belong here too: reliance on an accountant to request an extension fails for the same reason reliance on an accountant to file fails.

• not decided
  Haynes v. United States760 F. App'x 324 (5th Cir. 2019) (unpublished) · Court of AppealsA CPA e-filed, the transmission was rejected, and nobody told the taxpayers; a fact dispute about the taxpayers’ own diligence precluded summary judgment, and the court took no position on whether e-file reliance can ever be reasonable cause.
• denied
  Intress v. United States404 F. Supp. 3d 1174 (M.D. Tenn. 2019) · District CourtReliance on a preparer to e-file is reliance on an agent; complaint dismissed.
• granted
  Ensyc Technologies v. CommissionerT.C. Summary Opinion 2012-55 · Docket recordAn S corporation owner who credibly testified that he mailed the Form 1120S on time exercised ordinary business care and prudence; the IRC 6699 penalty did not apply.
• denied
  Anthony Tesoriero v. CommissionerT.C. Memo. 2012-261 · Docket recordReliance on an accountant to file an extension request is not reasonable cause, and the taxpayer never asked for one or followed up.
• partial
  Louis Greenwald v. CommissionerT.C. Memo. 2011-239 · Docket recordReliance on an accounting firm to request an extension was not reasonable cause for the late return, but reliance on its professional advice did defeat the accuracy-related penalty.

Open the finder: e-file or mailing problem

6. Ignorance of the law

Not knowing that a return was due, or that an item was taxable, is a mistake of law, and IRM 20.1.1.3.2.2.6 and the courts treat it the same way: it is not reasonable cause by itself. The courts do give weight to the taxpayer’s education, experience and sophistication, and to whether the law was settled or genuinely uncertain, which is why the few wins in this group involve unsophisticated taxpayers facing an unusual item, and the losses involve sophisticated taxpayers who made no inquiry. A belief that no tax was owed, with no professional advice behind it, has lost every time. Of 46 decisions, 4 were won outright and 6 in part.

• denied
  Brian D. Ray & Betsy Ray v. CommissionerT.C. Memo. 2018-160 · Docket recordBeing unaware of a filing requirement is a mistake of law that does not amount to reasonable cause.
• denied
  Jennifer Joy Fields & Walter T. Fields v. CommissionerT.C. Summary Opinion 2022-22 · Docket recordStatutory complexity alone is not reasonable cause; the taxpayers did not show a good-faith effort to work out their liability.
• denied
  James M. Galloway & Sarah M. Galloway v. Commissioner149 T.C. No. 19 · 2017 · Docket recordClaiming the American Opportunity Credit for a fifth year, contrary to settled law, was not reasonable cause; the court distinguished cases where the law was uncertain.
• granted
  Maria M. Faust v. CommissionerT.C. Memo. 2019-105 · Docket recordA taxpayer with limited English, limited education and a history of abuse had an honest and reasonable misunderstanding about a retirement distribution; no accuracy-related penalty.
• partial
  Suzanne D. Oster Ozimkoski v. CommissionerT.C. Memo. 2016-228 · Docket recordA widow had reasonable cause for the part of the underpayment tied to inherited IRA funds she passed to a stepson, but not for unreported IRA distributions.
• denied
  Beekman Vista, Inc. v. CommissionerT.C. Memo. 2018-61 · Docket recordA good-faith belief that no return was required is not reasonable cause unless it rests on advice from informed, competent counsel.

Open the finder: ignorance or mistake of law

7. Financial hardship and the failure-to-pay standard

For failure to file, financial trouble is almost never reasonable cause: the return costs nothing to file. For failure to pay, Treas. Reg. 301.6651-1(c)(1) sets a specific test: the taxpayer must show ordinary business care and prudence in providing for payment of the tax and that paying on time would have caused undue hardship, and the regulation says the taxpayer’s financial situation, including reasonably anticipated receipts and expenses, is considered. The cases turn on evidence of cash on hand and what it was spent on. A business that cut payroll, deferred other creditors and tried to sell assets won; taxpayers who paid an ex-spouse, made lavish purchases or simply asserted hardship lost. The Tax Court has noted a circuit split on whether financial difficulty alone can ever be reasonable cause for employment tax failures, and the Third Circuit in Thouron added that expert advice plus inability to pay can excuse a late payment. Of 23 decisions, 1 was won outright.

• granted
  Custom Stairs & Trim, Ltd., Inc. v. CommissionerT.C. Memo. 2011-155 · Docket recordA small stair-building company that cut payroll and benefits, paid expenses selectively and tried to sell real property after Hurricane Ivan and the recession exercised ordinary business care and prudence; failure-to-deposit and failure-to-pay penalties abated.
• denied
  Estate of Hartsell v. CommissionerT.C. Memo. 2004-211 · Docket recordAn estate that paid $100,000 toward a $4.2 million estate tax by the due date, after inadequate inquiries into financing, did not show ordinary business care and prudence in providing for payment.
• denied
  Susan Kathleen Cunningham v. CommissionerT.C. Summary Opinion 2013-27 · Docket recordA taxpayer whose lavish purchases left her unable to pay had not exercised ordinary business care and prudence.
• denied
  Stevens Technologies, Inc. v. CommissionerT.C. Memo. 2014-13 · Docket recordA government contractor’s cash-flow disruption from a troubled contract was not reasonable cause for unfiled Forms 941, unpaid tax and missed deposits; the court noted most circuits accept financial difficulty as possible reasonable cause.
• not decided
  C1 Design Group, LLC v. United StatesNo. 1:15-cv-146 (D. Idaho Dec. 20, 2016) · District CourtWhether a business exercised ordinary business care and prudence during a cash crunch was a question of fact; evidence of cash on hand was essential, and the government’s summary judgment motion was denied.
• not decided
  Estate of Thouron v. United States752 F.3d 311 (3d Cir. 2014) · Court of AppealsReliance on a tax expert’s advice may be reasonable cause for a late payment if the estate can also show inability to pay or undue hardship; summary judgment for the government vacated.

Open the finder: financial hardship, failure to pay

8. IRS error or advice

IRC 6404(f) requires abatement of a penalty attributable to erroneous written advice from the IRS given in response to a specific written request, and IRM 20.1.1.3.3.4 covers oral advice as a reasonable cause matter. In litigation the argument rarely has the paper behind it. The dataset holds only 6 decisions tagged IRS error or advice: a pleading-stage win where the taxpayers alleged specific communications with an IRS employee, and losses where the taxpayer pointed to an IRS calculation error, to unsolicited IRS documents, or to the IRS having accepted the same position in earlier years. Prior acceptance is not advice.

• not decided
  Nance v. United StatesNo. 12-1064 (W.D. Tenn. Apr. 11, 2013) · District CourtTaxpayers stated a plausible claim that their late Form 3520-A was due to reasonable cause based on communications with an IRS employee; motion to dismiss denied.
• denied
  United States v. HolmesNo. 4:15-cv-00626 (S.D. Tex. Aug. 16, 2016) · District CourtAn IRS calculation error in the assessment did not give the estate reasonable cause for failing to pay what was assessed.
• denied
  Heartland Automotive Enterprises, Inc. v. United StatesNo. 5:07-CV-037 (M.D. Ga. May 27, 2009) · District CourtA dealer that made timely paper deposits instead of required electronic ones did not show reasonable cause; unsolicited IRS documents did not justify the noncompliance.
• denied
  Betty Amos v. CommissionerT.C. Memo. 2022-109 · Docket recordThe IRS’s acceptance of NOL carryforwards in earlier years did not establish reasonable cause and good faith for claiming unsubstantiated NOLs later.
• granted
  Louelia Salomon Frias & Mervyngil Salomon v. CommissionerT.C. Memo. 2017-139 · Docket recordA nurse who did not report a deemed distribution from a defaulted plan loan had reasonable cause in a close case; nonreceipt of the Form 1099-R alone would not have been enough.

Open the finder: IRS error or advice

9. First-year and new-requirement arguments

A new filing or deposit requirement, or a first year in business, is often offered as reasonable cause and is treated by the courts as a variant of ignorance of the law. The decisions that address it turn on notice: the requirement was published, the taxpayer had the means to learn of it, and a competent adviser would have known. The small partnership relief of Rev. Proc. 84-35 is the one place a first-year filer gets a structured answer, and only if every condition is met. For information returns the same logic appears in the Tax Court’s treatment of software: a drop in the number of forms filed should itself have put the filer on notice. The finder has only 2 decisions tagged with this category, so the list below draws on the related ones.

• denied
  Commonwealth Bank & Trust Co. v. United StatesNo. 3:13-cv-01204 (W.D. Ky. Jan. 29, 2016) · District CourtA bank that paid on time with paper coupons but failed to deposit electronically as newly required lacked reasonable cause; ignorance of the law is not reasonable cause.
• denied
  Heartland Automotive Enterprises, Inc. v. United StatesNo. 5:07-CV-037 (M.D. Ga. May 27, 2009) · District CourtTimely paper deposits in place of required electronic deposits did not show reasonable cause.
• denied
  Battle Flat, LLC v. United StatesNo. 5:13-cv-05070 (D.S.D. Sept. 21, 2015) · District CourtA partnership that did not meet the conditions of Rev. Proc. 84-35 and offered no other reasonable cause could not recover the IRC 6698 penalties.
• denied
  Dealers Auto Auction of Southwest LLC v. CommissionerT.C. Memo. 2025-38 · Docket recordAn auto auction that filed fewer Forms 1099 than required because of a software problem did not prove what went wrong or what controls it had; software is not professional advice, and the reduced count should have put it on notice.

Open the finder: first year or new requirement

10. Natural disasters

A declared disaster usually brings a postponement under IRC 7508A, so the cases that reach court are about the months after the postponement ended, or about a disaster that hit the taxpayer’s records or business without a declaration that covered the period. The two decisions in the dataset tagged natural disaster both went the taxpayer’s way, at least in part, because the taxpayer could show what the disaster destroyed and what was done afterwards. The contrast cases are losses from events that were not disasters: a break-in, a fire set by another person. The lesson is in the documentation: dates, what was lost, when the replacement effort started, and when the return followed.

• granted
  Custom Stairs & Trim, Ltd., Inc. v. CommissionerT.C. Memo. 2011-155 · Docket recordAfter Hurricane Ivan and the recession, a company that cut payroll, paid selectively and tried to sell property showed ordinary business care and prudence; employment tax penalties abated.
• partial
  Christopher W. Johnson, Jr. v. CommissionerT.C. Memo. 2012-231 · Docket recordHurricane Katrina’s destruction of records was reasonable cause for the late 2005 return; no reasonable cause for the accuracy-related penalties.
• denied
  Merrill C. Roberts v. CommissionerT.C. Memo. 2014-74 · Docket recordRecords burned by a former girlfriend did not excuse the late return where the taxpayer was also preoccupied with earlier audits.
• denied
  Terry Gene Akey v. CommissionerT.C. Memo. 2014-211 · Docket recordMajor health problems and a warehouse break-in did not establish reasonable cause for late filing, and no evidence of inability to pay was offered for the late payment.

Open the finder: natural disaster

11. Embezzlement and employee failures

An employee or payroll agent who steals, conceals or simply fails to file is an agent, and Boyle attributes the agent’s failure to the principal. The courts recognise one exception: misconduct that actually disabled the business from complying, for example by concealing the problem so completely that no reasonable system of supervision would have caught it. The decisions show how hard that is to prove. The business must show the controls it had, why they did not catch the problem, and what it did the moment it learned. The one win in the group is an elderly, ill solo practitioner whose systems failed only because he could no longer supervise them. Of 10 decisions, 1 was won outright.

• denied
  Deaton Oil Co., LLC v. United States904 F.3d 634 (8th Cir. 2018) · Court of AppealsA payroll agent’s failure to file and pay employment taxes is not reasonable cause for the principal unless the failure actually disabled the principal; vague advice from an outside CPA was not the advice Boyle protects.
• denied
  Lindsay v. United States4 F.4th 377 (5th Cir. 2021) · Court of AppealsA taxpayer whose agent embezzled funds and failed to file for four years could not assert reasonable cause under Boyle; he could have controlled his agent.
• denied
  Lanco Inns, Inc. v. Internal Revenue ServiceNo. 01-CV-00510 (N.D.N.Y. June 30, 2006) · District CourtAn employee’s concealment of unpaid payroll taxes was not reasonable cause; relief is available only where the misconduct actually disabled the company.
• denied
  Xibitmax, LLC v. CommissionerT.C. Memo. 2017-133 · Docket recordReliance on an employee and an office administrator to prepare and file Forms 941 and 940, and their poor performance, was not reasonable cause.
• denied
  All Stacked Up Masonry, Inc. v. United States150 Fed. Cl. 540 (2020) · Court of Federal ClaimsAn employee’s user error in QuickBooks and an owner’s injury that did not disable the business were not reasonable cause; agents’ failures are attributed to the taxpayer.
• granted
  Donald S. Tracy v. CommissionerT.C. Summary Opinion 2023-20 · Docket recordThe exception in practice: an elderly, ill solo lawyer whose systems failed only because he could no longer supervise his assistant was diligent, and the additions were abated.

Open the finder: embezzlement or employee failure

12. How to document a claim

The winning decisions share a shape: a timeline, evidence of what the taxpayer did before and after the impediment, and a reason the failure was outside the taxpayer’s control rather than a choice. The losing decisions share a different shape: an assertion, no documents, and an argument raised late. The checklist below is derived from the cases above and from IRM 20.1.1.3.2; the reasonable cause letter template is organised the same way.

1. Timeline. Due date (with any extension), the date of the event relied on, the date it ended, and the date the return was filed or the tax paid. Courts measure the gap between the end of the impediment and compliance.
2. The impediment, with paper. Medical records that show dates and severity; a death certificate; a police or insurance report; the FEMA declaration; the bookkeeper’s termination letter; the e-file rejection notice. Describe what the taxpayer could and could not do during the period, and be ready to explain other affairs handled at the time.
3. What was done anyway. Other returns filed, estimated payments made, an extension requested, a partial payment, the request to the third party for the missing K-1 or W-2 and its date.
4. For failure to pay: the money. Bank balances at the due date, reasonably anticipated receipts and expenses, what the available cash was spent on and why those payments came first, and the steps taken to raise funds (asset sales, loans refused). Treas. Reg. 301.6651-1(c)(1) asks for this, and C1 Design and Custom Stairs show it deciding the case.
5. For reliance: the advice. Who the adviser was and their qualifications; the engagement; what information the taxpayer gave; the advice itself, in writing if it exists; and the taxpayer’s review of the return. Keep Neonatology’s three parts in mind and Boyle’s line: advice about what the law requires can be relied on, advice about when to file cannot.
6. For employee failures: the controls. Who was responsible, how they were supervised, what reports the owner saw, how the problem was concealed, and what happened on discovery.
7. Raise it early and everywhere. In the Form 843 or refund claim (the variance doctrine barred the defense in Mycles Cycles), at the CDP hearing, in the petition, and on brief (Betz treats silence on brief as abandonment; Merino holds that statements in briefs are not evidence). Ask for First Time Abate first if the client qualifies; it does not depend on any of this.

• granted
  Donald S. Tracy v. CommissionerT.C. Summary Opinion 2023-20 · Docket recordSystems in place, a documented decline in health, and prompt action when the failure surfaced: the record a court needs to find diligence.
• granted
  Custom Stairs & Trim, Ltd., Inc. v. CommissionerT.C. Memo. 2011-155 · Docket recordPayroll cuts, selective payment of creditors and attempts to sell property: the financial record that satisfied Treas. Reg. 301.6651-1(c)(1).
• granted
  Estate of Skeba v. United StatesNo. 17-cv-10231 (D.N.J. Oct. 3, 2019) · District CourtAn estate that paid most of its tax on time and filed late because of litigation over its assets prevailed; the IRS’s one-line denial was arbitrary and capricious.
• denied
  Mycles Cycles, Inc. v. United StatesNo. 18-cv-314 (S.D. Cal. Sept. 4, 2019) · District CourtReasonable cause not raised in the administrative refund claim could not be raised in the refund suit.
• denied
  Mark Betz & Christine Betz v. CommissionerT.C. Memo. 2023-84 · Docket recordFailing to argue reasonable cause on brief abandoned the issue; in any event, reliance on a research credit study firm was not ordinary business care.
• denied
  Guillermo Merino, Jr. & Lisa Merino v. CommissionerT.C. Memo. 2013-167 · Docket recordReasonable cause cannot be raised for the first time in briefs without trial evidence; statements in briefs are not evidence.

Open the finder: every decision, newest first

Outcomes by excuse and by penalty

Counts from the 303-decision dataset behind the finder (a decision can carry more than one excuse tag and more than one penalty section). Not decided is a pleading-stage or summary-judgment ruling that did not reach the merits.

Two penalties in the second table deserve a note. IRC 6654 has no reasonable cause exception (the Tax Court in Mendes, 121 T.C. 308, and many later cases), so the zero wins are structural; the only relief is the waiver in 6654(e)(3) for casualty, disaster, or retirement or disability in the year. And for charitable property, IRC 6664(c)(3) removes the reasonable cause defense to the gross valuation misstatement penalty for returns after the Pension Protection Act of 2006, which is why several easement cases show partial outcomes: reasonable cause for the 20 percent penalty, none available for the 40 percent penalty.

The selection is litigated decisions only. Taxpayers who got relief from a campus, by phone, or from Appeals do not appear, so these rates say which arguments survive a judge, not how often a well-documented request succeeds.

Questions practitioners ask