[Date]
Internal Revenue Service
[Address or fax number shown on the notice]
Re: Request for penalty abatement based on reasonable cause
Taxpayer: [Client legal name]
Taxpayer identification number: [SSN or EIN]
Form and tax period(s): [Form number and period(s)]
Notice: [CP or letter number] dated [Notice date]
Penalty: [Penalty name and IRC section], [Amount]
To whom it may concern:
I represent the taxpayer under the enclosed Form 2848. The taxpayer requests abatement of the penalty identified above because the failure to [file / pay / deposit / furnish] on time was due to reasonable cause and not willful neglect. The facts are set out below in the order the IRS considers them under IRM 20.1.1.3.2.
1. What happened and when
[Describe the event with exact dates: e.g. hospitalized from [date] to [date]; office flooded on [date]; bookkeeper resigned without notice on [date]]
2. Why the taxpayer could not comply
The return was due on [Due date]. During [the period from [date] to [date]], [explain why the event prevented compliance and why it could not have been anticipated or worked around]
3. How the event caused the failure
[Connect the event to the specific failure: who had authority to sign or pay, what records were unavailable, why no one else could act]
4. How the taxpayer handled other affairs
[Explain what else the taxpayer did or could not do during the same period, e.g. other bills unpaid, business closed, or why some obligations were met and this one was not]
5. What the taxpayer did once circumstances changed
On [Date circumstances ended], [describe the steps taken]. The return was filed on [Filing date] and the tax was paid on [Payment date].
Compliance history
[Summarize the prior three years: returns filed and paid on time, no prior penalties of this type]
Request
The taxpayer exercised ordinary business care and prudence but was nevertheless unable to comply within the time required. Please abate the penalty of [Amount] for [Period].
Declaration. Under penalties of perjury, I declare that I have examined this statement, including accompanying documents, and, to the best of my knowledge and belief, it is true, correct, and complete.
[Taxpayer signature] [Date]
[Taxpayer name and title, if signing for an entity]
[Representative name, credential, firm, CAF number, phone]
Enclosures: Copy of notice; Form 2848; timeline; [List each supporting document, e.g. hospital admission and discharge records, death certificate, insurance claim, correspondence requesting records]
When to use it
Use this letter when the penalty is one that allows reasonable cause relief and FTA does not apply: a second penalized year, a penalty FTA does not cover, or a client who would rather keep FTA in reserve. Check the order of relief first. IRM 20.1.1.3 has the IRS consider correction of IRS error, then statutory and regulatory exceptions, then administrative waivers, then reasonable cause. If the client qualifies for First Time Abate, the IRS will apply it before reading this statement.
The IRM also notes that “Reasonable cause relief is not available for all penalties; however, other exceptions may apply.” Accuracy-related penalties are judged under Treas. Reg. 1.6664-4 and information return penalties under Treas. Reg. 301.6724-1, both listed in IRM 20.1.1.3.2.1. For payer clients facing information return penalties, the 301.6724-1 standard is covered at TIN Compliance.
The standard the reviewer applies
The core test is in IRM 20.1.1.3.2: “Reasonable cause relief is generally granted when the taxpayer exercised ordinary business care and prudence in determining their tax obligations but was nevertheless unable to comply with those obligations.” The same subsection then lists the questions employees consider. This template uses them as headings because the reviewer is working from the same list:
| IRM question | Template section |
|---|---|
| What happened and when did it happen? | 1. What happened and when |
| What facts and circumstances prevented the taxpayer from complying? | 2. Why the taxpayer could not comply |
| How did the facts and circumstances result in the taxpayer not complying? | 3. How the event caused the failure |
| How did the taxpayer handle the remainder of their affairs during this time? | 4. How the taxpayer handled other affairs |
| Once the facts and circumstances changed, what attempt did the taxpayer make to comply? | 5. What the taxpayer did once circumstances changed |
Section 5 is where many requests fail. The IRM is explicit: “Reasonable cause does not exist if after the facts and circumstances that explain the taxpayer’s noncompliant behavior cease to exist, the taxpayer fails to comply with the tax obligation within a reasonable period of time.”
What each section does
Dates. IRM 20.1.1.3.2.2 says “To show reasonable cause, the dates and explanations should clearly correspond with events on which the penalties are based.” Put the due date, the period of incapacity and the compliance date in the same paragraph so the reviewer can see the overlap. A one-page timeline attached as an exhibit helps on multi-period requests.
Compliance history. The reviewer checks at least three preceding years. A clean history helps, but the IRM warns that “a first-time failure to comply does not by itself establish reasonable cause,” so it supports the facts rather than replacing them.
Other affairs. If the client ran the business, paid other bills or traveled during the period, the reviewer will ask why this obligation was different. Address it before they ask.
Declaration. Under IRM 20.1.1.3.1, oral or unsigned requests can be considered for failure to file, failure to pay and failure to deposit penalties up to a threshold the public IRM redacts. For everything else, “The taxpayer must provide a written statement, signed under the penalty of perjury, requesting penalty relief for all other penalties.” The IRM lists TIN penalties, information return penalties and penalties assessed by a compliance program as examples. The declaration in the template follows the Form 843 jurat.
Evidence by type of cause
| Cause | IRM section | What the IRS looks for |
|---|---|---|
| Death, serious illness, unavoidable absence | 20.1.1.3.2.2.1 | Relationship to taxpayer, dates, and for entities whether the person had sole authority to sign or pay |
| Unable to obtain records | 20.1.1.3.2.2.3 | Why records were needed, steps taken to get them, why the taxpayer did not estimate, whether the taxpayer complied promptly once records arrived, and copies of letters written |
| Mistake | 20.1.1.3.2.2.4 | Generally not reasonable cause alone; when and how discovered and how quickly corrected |
| Reliance on another party or advice | 20.1.1.3.2.2.5 | Whether the claim is reliance on advice or reliance on someone to act; filing and paying duties generally cannot be delegated |
| Ignorance of the law | 20.1.1.3.2.2.6 | Education, prior exposure to the tax, recent law changes, complexity |
| Forgetfulness | 20.1.1.3.2.2.7 | Generally not reasonable cause |
| Inaccessible notices | 20.1.1.3.2.2.8 | Description of the impairment, when the notice was received, prompt response once an accessible copy arrived |
On reliance, the IRM says the duty to file and pay “cannot be delegated,” so a letter that blames a payroll provider or bookkeeper needs more: inability to access the client’s own records, or a law change the client could not reasonably have known about. If the client relied on written advice from the IRS, use the separate statutory route in penalty relief for erroneous IRS advice. And the IRM reminds employees that “Reasonable cause should never be presumed, even in cases where ignorance of the law is claimed.”
Signing, attaching and sending
- Have the taxpayer (or an officer with authority, for an entity) sign the declaration. A representative who signs only on the cover letter is not making the perjury statement for the taxpayer.
- Attach the notice, Form 2848, the timeline and copies (not originals) of supporting documents.
- Send to the address or fax number on the notice. If you prefer a form, use Form 843; its line 8 asks you to explain in detail and attach supporting evidence.
- If the penalty has been paid, the request is also a claim for refund and the refund statute matters; see refund claims for paid penalties.
- If denied, request Appeals consideration in writing. IRM 20.1.1.4.1 says Appeals reviews a penalty only after the request was denied and the taxpayer asks for an appeal.
Common mistakes
- Describing a hardship that ended months before the return was filed, with no explanation for the gap.
- Generic illness claims with no dates and no medical documentation.
- Arguing that the client did not know about the requirement without addressing education, prior filing history or complexity.
- Leaving the perjury declaration unsigned on a penalty that requires it.
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
Can I combine reasonable cause and FTA in one letter?
Yes. Many practitioners request FTA and attach a reasonable cause statement as the alternative. The IRS applies FTA first if the criteria are met. The FTA letter template has the alternative paragraph built in.
Does a clean compliance history establish reasonable cause?
No. IRM 20.1.1.3.2.2 treats compliance history as one factor to weigh with the reasons given. It is the FTA waiver, not reasonable cause, that turns on history alone.
Is a representative's signature enough on the perjury statement?
The IRM requires a written statement signed under penalty of perjury for penalties other than FTF, FTP and FTD. Having the taxpayer sign the declaration avoids any question about whose knowledge the statement reflects.
Can reasonable cause be raised during an exam before the penalty is assessed?
Yes. IRM 20.1.1.4 says taxpayers may challenge a penalty at any stage, including review before assessment through deficiency procedures. See accuracy-related penalties.