7 Things That DO Count as Reasonable Cause

If you’ve ever faced IRS penalties and wondered, “Does my situation even count as reasonable cause?”—you’re not alone. The IRS has strict but specific criteria for granting penalty relief. Knowing what qualifies can save you time, money, and stress.

1. Serious Illness or Injury

If you or an immediate family member had a medical emergency that prevented you from filing or paying, this often qualifies—especially if hospitalization or extended care was involved.

2. Death in the Family

The passing of a spouse, parent, or dependent during tax season can disrupt your ability to manage financial obligations, and the IRS recognizes this.

3. Natural Disasters

Fires, floods, hurricanes, or federally declared disasters affecting your records or finances are valid causes. Include proof like FEMA declarations or insurance claims.

4. Inability to Obtain Records

If key tax documents were lost, destroyed, or inaccessible due to events outside your control, this could qualify—especially if you took steps to retrieve or replace them.

5. Incorrect Advice From a Tax Professional

If a CPA or advisor gave you wrong information that caused a late or incorrect filing—and you acted in good faith—that can be considered reasonable cause, especially with proof of communication.

6. Mental or Physical Incapacitation

Documented impairments or disabilities that impacted your capacity to manage your affairs can provide a strong case for relief.

7. Significant Business Disruption

Events like a major supplier going bankrupt, an internal theft, or a key employee leaving suddenly could count—particularly if they directly affected your ability to comply.

Bonus Tip: Stack Your Evidence

The more proof you provide (medical records, police reports, statements from professionals), the better your chances. IRS agents are trained to look for specificity and timeliness.

Call to Action

Think your situation might qualify? Use our free Reasonable Cause Checklist to assess your case—or let us build it for you with our DFY abatement service.