1. Qualification Criteria for IRS Reasonable Cause Penalty Abatement
For failure-to-file and failure-to-pay penalties under IRC § 6651, taxpayers generally must show that they exercised ordinary business care and prudence but were nevertheless unable to file or pay on time. The IRS evaluates reasonable cause based on the individual facts and circumstances.
Circumstances That May Support Reasonable Cause
The Internal Revenue Manual identifies circumstances that may support reasonable cause when they directly affected the taxpayer's ability to comply:
- Death, serious illness, or unavoidable absence
- Fire, casualty, natural disaster, or other disturbance
- Inability to obtain necessary records
- Certain mistakes based on the surrounding facts and circumstances
- Erroneous advice or qualifying reliance
| Relief Category | Legal or Administrative Basis | Key Considerations |
|---|---|---|
| Reasonable Cause | Treas. Reg. § 301.6651-1(c); IRM 20.1.1.3.2 | Ordinary business care and prudence |
| Serious Illness or Unavoidable Absence | IRM 20.1.1.3.2.2.1 | Timing, severity, duration, and effect on compliance |
| Fire, Casualty, or Natural Disaster | IRM 20.1.1.3.2.2.2 | Effect of the event on the ability to file or pay |
| Unable to Obtain Records | IRM 20.1.1.3.2.2.3 | Reason records were unavailable and efforts to obtain them |
| Erroneous Written IRS Advice | IRC § 6404(f); Treas. Reg. § 301.6404-3 | Written request, IRS response, and resulting penalty |
Medical Incapacity and Serious Illness
A serious illness or hospitalization may establish reasonable cause when it prevents the taxpayer or responsible person from handling the tax obligation. The IRS considers the timing and severity of the condition and whether the taxpayer acted within a reasonable period after the circumstances ended.
Natural Disasters and Inaccessible Records
Fire, casualty, natural disasters, or an inability to obtain necessary records may also support reasonable cause. The IRS considers how the event prevented compliance and what reasonable efforts the taxpayer made to obtain or reconstruct the required information.
2. How to Request IRS Penalty Relief
The appropriate procedure depends on the penalty and the IRS notice involved. Taxpayers should first review the instructions in the notice to determine how and where to request relief.
Requesting Relief from the IRS
Some reasonable cause requests can be made by calling the number shown on the IRS notice. If the request cannot be approved by telephone, taxpayers may need to submit a written explanation or Form 843 when appropriate.
Supporting evidence should clearly connect the claimed circumstances to the period of noncompliance and show what the taxpayer did once the circumstances preventing compliance ended.
Appealing a Denied Penalty Request
If the IRS denies penalty relief, the taxpayer may have the right to seek review by the IRS Independent Office of Appeals. The applicable procedure and deadline depend on the notice issued, so taxpayers should follow the appeal instructions provided by the IRS.
3. Automatic Penalty Relief and the Fta Transition
Reasonable cause is not the only form of IRS penalty relief. In 2026, the IRS began transitioning from First Time Abate (FTA) to Automatic Exemption from Penalty (AEP) for eligible taxpayers.
How Aep Changes First Time Abate
AEP applies to eligible original returns beginning with tax year 2025 and eligible quarterly returns beginning in 2026. Eligibility generally depends on a compliant filing and payment history for the previous three years, or 12 consecutive quarters for quarterly filers.
FTA remains relevant during the transition for certain earlier periods and eligible returns processed before AEP consideration. For original returns with due dates on or after January 1, 2027, AEP replaces FTA for eligible returns.
Taxpayers who do not qualify for AEP may still request reasonable cause relief when their individual circumstances satisfy the applicable standard.
4. Frequently Asked Questions
What is the difference between AEP and Reasonable Cause Relief?
AEP is an administrative relief mechanism based primarily on a taxpayer's prior compliance history and is applied automatically to eligible returns. Reasonable Cause Relief is fact-specific and requires the taxpayer to establish that circumstances prevented compliance despite the exercise of ordinary business care and prudence.
Can tax penalties be abated if I relied on incorrect advice from an accountant?
It depends on the nature of the reliance. Merely relying on a tax professional to meet a filing deadline generally does not establish reasonable cause for a taxpayer's own filing obligation. Different considerations may apply when a taxpayer reasonably relies on professional advice concerning a substantive tax question after providing the adviser with the information necessary to evaluate the issue. The IRS considers the particular facts and circumstances when determining whether such reliance supports penalty relief.
27 Aug, 2026
