How to Request IRS Penalty Abatement - A Guide to IRS Form 843 and IRS Penalty Relief
- Heath Vo
- Jul 25
- 8 min read
Updated: 3 days ago
Quick Take on IRS Penalty Relief
Got hit with IRS penalties? You might be able to get them reduced or wiped out. The official vehicle is IRS Form 843, Claim for Refund and Request for Abatement (not Form 853—common mix-up). Use it to ask the IRS to remove or refund certain penalties, interest (in limited situations), additions to tax, and specific non‑income taxes.
If you’ve got a one‑time slip‑up, a legit “life happened” situation, or the IRS straight‑up messed something up, keep reading. We’ll walk you through when penalty relief is possible, how to choose the right type of relief (Reasonable Cause vs. First‑Time Abate vs. statutory/administrative options), and exactly how to complete and file Form 843 so your request doesn’t die in an unopened mail bin.
Table of Contents
Penalty Abatement 101 – The Big Three Paths to Relief
When to Use Form 843 (and When Not To)
Common Penalties You Can Request Relief From
Step‑by‑Step: Completing Form 843 for Penalty Abatement
Writing an Effective Penalty Abatement Statement (Templates!)
Supporting Documentation: What to Attach & How to Format It
Where to File Form 843 (Getting It to the Right IRS Location)
Statute of Limitations: Deadlines That Can Kill Your Claim
Tracking, Follow‑Up & Escalation if the IRS Ghosts You
When to Call in the Exes (How ExFed Tax Can Help)
Copy‑Paste Resources: Meta Data, SEO Keywords & Snippets
1. Penalty Abatement 101 – The Big Three Paths to Relief
The IRS has multiple ways to reduce or remove penalties. Knowing which lane you’re in before you submit your request will save you time (and postage).
A. Reasonable Cause
You tried to comply, but something outside your control prevented it. Think:
Serious illness, death, or unavoidable absence of key person handling tax matters.
Records destroyed by casualty, disaster, or other event.
Reliance on incorrect written IRS advice or a qualified tax professional (when reasonable).
Other facts showing you exercised ordinary business care and prudence.
B. First‑Time Abate (FTA)
The IRS’s “You get one mulligan” program. Available once per return type when:
You filed (or filed late but are now compliant) for the past three years with no significant penalties.
All required returns for the current period are filed.
Any outstanding tax due is paid or arranged. Great for failure‑to‑file (FTF), failure‑to‑pay (FTP), and failure‑to‑deposit (FTD) penalties when you otherwise have a clean history.
C. Statutory or Administrative Relief
Other relief tools exist in niche situations: IRS error; federally declared disaster relief; combat zone postponement; interest abatement due to IRS delay; or a misapplied payment that triggered cascading penalties. These often require more documentation—but are worth pursuing when applicable.
Pro Tip: When you call the IRS to request Reasonable Cause, they may automatically apply FTA if you qualify and it’s better for you. Always ask what was applied so you don’t burn your one‑time FTA unintentionally.
2. When to Use Form 843 (and When Not To) Use Form 843 to request a refund or abatement of:
Penalties assessed in connection with late filing, late payment, or certain information return failures (when allowed through admin relief paths).
Interest charged because of IRS error or delay (narrow, but real).
Additions to tax or certain fees assessed outside the normal income tax return process.
Trust Fund Recovery Penalty (TFRP) abatement/refund (complex—talk to a pro).
Do not use Form 843 for:
Income tax amount changes (use an amended return: Form 1040‑X, 1120‑X, etc.).
Estate or gift tax changes that belong on Forms 706/709 unless specifically instructed.
Employment tax corrections that must go through Forms 941‑X, 940‑X, etc.
Additional Medicare Tax or standard income tax refund claims.
When in doubt: If you’re changing the underlying tax return numbers, amend the return. If the tax is correct but the penalties/interest are the problem, Form 843 is in play.
3. Common Penalties Eligible for Relief
Below are the penalty categories where Form 843 or a phone request may get you relief. Eligibility depends on facts, compliance history, and specific IRS rules.
Penalty Type | IRC Section (Typical) | Relief Paths | Notes |
Failure to File (FTF) | §6651(a)(1) | FTA; Reasonable Cause | Hefty—5%/mo up to 25%; relief saves real $$. |
Failure to Pay (FTP) | §6651(a)(2)/(3) | FTA; Reasonable Cause | Keeps accruing until paid. |
Failure to Deposit (FTD) Payroll | §6656 | FTA (limited); Reasonable Cause | Strict timelines. |
Accuracy‑Related | §6662 | Reasonable Cause & Good Faith | Documentation critical. |
Information Return Penalties | §6721/6722 | Reasonable Cause (narrow); Admin relief | Often automated—document tech failures. |
Trust Fund Recovery Penalty | §6672 | Reasonable Cause / not willful | Legal rep strongly advised. |
Table is a general roadmap; always confirm the specific penalty code printed on your IRS notice.
4. Step‑by‑Step: Completing Form 843 for Penalty Abatement
Grab the latest version (Rev. December 2024 or newer). Here’s how to fill it out for a penalty abatement claim.
Formatting Tip: If requesting relief for multiple tax periods or penalty types, file a separate Form 843 for each. Bundle with a cover letter if related.
Line‑by‑Line Highlights (Penalty Abatement Focus)
Top Block – Taxpayer ID & PeriodEnter your name (or business name), address, SSN/EIN, and the tax period ending date that ties to the notice.
Line 1 – Type of Tax or FeeCheck the box that best fits. For most individual penalty abatements tied to income tax (FTF/FTP), you’ll choose the box for “Abatement or refund of penalty…allowed under the law” (catch‑all). Businesses: choose accordingly.
Line 2 – PeriodEnter the specific tax period (e.g., 12/31/2023). Payroll filers: use quarter end.
Line 3 – Original Return Filed?Indicate whether you filed a return. Attach copy if helpful in demonstrating compliance.
Line 4 – Penalty or Tax Code SectionEnter the IRC section shown on your IRS notice (e.g., 6651(a)(1)). If multiple, list all or attach schedule.
Line 5 – Amount to Be Refunded or AbatedEnter the penalty amount assessed (or paid) that you want removed. If partially paid, specify the portion.
Line 6 – Reason BoxCheck the reason that fits (penalty due to reasonable cause; IRS error; other). When in doubt and Reasonable Cause applies, check the reasonable cause box and explain fully in Line 7 attachment.
Line 7 – Explanation (The Money Section)Attach a detailed narrative: what happened, when, who was affected, what steps you took to comply, and how you corrected the issue. Include timelines, supporting docs, and a statement that you exercised ordinary business care and prudence.
Signature: Must be signed under penalties of perjury by taxpayer or authorized representative with Form 2848 Power of Attorney attached (if not already on file).
5. Writing an Effective Penalty Abatement Statement
This is where most Form 843s succeed or fail. The IRS needs facts, dates, and causation—not feelings or what you think happened. You may feel "really, really bad" about missing your deadline or "I think it got lost in the mail" - the IRS wants to see the receipts!
Tell the Story in Order
Background: Who normally handles tax compliance? (You, bookkeeper, CPA, spouse?)
Triggering Event: Illness, death, natural disaster, system failure, records destroyed, wrong IRS advice, etc.
Impact: Why you could not meet the deadline or pay.
Correction: When and how you filed, paid, or fixed the issue once you could.
Future Compliance: Steps taken to prevent recurrence (new CPA, automated reminders, cloud backups, payroll provider, etc.).
Language to Include:
"Taxpayer exercised ordinary business care and prudence but was unable to comply due to [fact pattern]. Once the issue was discovered, taxpayer acted promptly to correct the noncompliance."
"Taxpayer has filed all required returns and is current on deposits going forward."
"Requesting abatement of penalties assessed under IRC §6651(a)(1) and §6651(a)(2) based on reasonable cause."
Be sure to mirror the requirements for your basis in the IRS abating your penalty!
Optional Attachments (Don't attach if it HURTS your cause!)
Hospital records or obituary (illness/death cases)
Insurance or police reports (casualty events)
IT failure logs or vendor correspondence (e‑file tech issues)
Copies of timely extension filings
Proof of prior compliance (transcripts showing no penalties past 3 years—helps FTA)
6. Supporting Documentation: What to Attach & How to Format It
Organize your packet so an IRS employee can scan it in minutes:
Suggested Order:
Cover letter (optional but helpful for pros)
Completed Form 843
Penalty Abatement Statement (narrative)
Supporting evidence (chronological tabs)
Copy of IRS notice(s)
Form 2848 Power of Attorney (if a representative is filing)
Formatting Tips:
Use labeled tabs or page numbers: “Exhibit A – Hospital Discharge Summary,” etc.
Highlight critical dates that tie to filing deadlines.
If emailing via practitioner e‑services secure upload (when available), merge to one PDF.
7. Where to File Form 843 (Get the Address Right!)
If you can't get anything else right - get the damn address right!
Rule of Thumb: If you’re responding to an IRS notice, mail it to the address on that notice. That routing barcode matters.
If no notice or your issue is not notice‑driven, mail to the IRS Service Center where you would normally file the return related to the penalty (individual vs. business; with/without payment). Certain specialty taxes (estate, gift, branded prescription drug fee, health insurance provider fee) use designated addresses in the instructions.
Because addresses shift (and get re‑routed during backlog periods), we strongly recommend:
Use the address printed on your most recent penalty notice unless the instructions or a practitioner hotline agent directs otherwise.
Send via certified mail, return receipt.
Keep a full copy of the submission.
Need help confirming the current address? Send us the notice—ExFed Tax will verify routing before you mail.
8. Statute of Limitations: Deadlines That Matter
Penalty abatement that results in a refund or credit is still subject to refund claim time limits under the tax law. Broadly:
File within 3 years of when the related return was filed (including extensions, if timely filed), or
Within 2 years from the date the penalty was paid—whichever is later.
If no return was filed, you generally have 2 years from payment. Special rules can extend the period
(disaster relief, combat zone, financial disability, etc.). Don’t play chicken with the statute—ask us to calculate your Refund Statute Expiration Date (RSED) before filing.
Check out our recent blog about Non-Filed Returns and IRS Refunds!
9. Tracking, Follow‑Up & Escalation
After mailing Form 843:
Allow 8–12 weeks for initial intake (longer in peak periods).
Use your certified mail tracking as proof of timely filing.
Call the IRS Practitioner Priority Service (if represented) or the number on your notice after 60–90 days to confirm receipt.
If no action after 6 months, you may have the right to pursue refund litigation (District Court or Court of Federal Claims) once administrative remedies are deemed exhausted. Talk to counsel before going nuclear.
10. When to Call in the Exes (How ExFed Tax Can Help)
We’re former IRS professionals who’ve read, written, and reviewed more penalty narratives than most auditors ever see. Here’s what we do for you:
Review IRS transcripts to spot all penalty assessments.
Determine best relief path (Reasonable Cause vs. FTA vs. hybrid).
Draft strong abatement narratives with evidence.
Calculate statute dates so you don’t miss deadlines.
File Form 843 packages and follow up with the IRS so you don’t sit on hold for three fiscal years.
Final Word
IRS penalties add up fast—but with the right facts, form, and follow‑through, many can be reduced or erased. If you’re unsure which relief applies, that’s exactly why ExFed Tax exists. We speak IRS. (Some of us wrote IRS.) Let’s fix this.
Ready to Fight a Penalty?
Book a consultation: exfedtax.com/schedule
Upload your notice securely: Intuit Document Portal (clients only)
Email: hello@exfedtax.com
This article provides general information and is not legal or tax advice. Always consult with a qualified tax professional about your specific situation.
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