How to Request IRS Penalty Abatement (And When It Actually Works)
If you’ve opened a letter from the IRS and seen penalties stacked on top of the taxes you already owe, you’re not alone. Late filing and late payment penalties can add hundreds — sometimes thousands — to your bill.
But here’s the thing most business owners don’t know: the IRS will sometimes reduce or remove these penalties. It's called penalty abatement, and yes — it's a real option, even if you still owe the tax.
🧾 What Is Penalty Abatement?
Penalty abatement is when the IRS agrees to waive certain penalties due to:
Reasonable cause (like illness, natural disaster, or financial hardship)
First-time penalty abatement (if you’ve been compliant in the past)
IRS error (if they messed up and charged you incorrectly)
You can request abatement by phone, letter, or by submitting Form 843.
📌 Common Penalties That May Be Abated
Failure to file (penalty for missing the tax deadline)
Failure to pay (penalty for not paying on time)
Failure to deposit (payroll-related, for employers)
Penalties from accuracy-related issues or fraud are much harder to get removed — but the everyday filing/payment ones? Definitely possible.
💡 Do You Qualify for Penalty Abatement?
You might qualify if:
You’ve filed on time for the past 3 years (or haven’t had penalties during that time)
You had a legitimate reason for missing a deadline (illness, death in the family, theft, or documented financial hardship)
You paid or are in the process of paying your taxes owed
✍️ How to Request It
There are three main ways to request a penalty abatement:
Call the IRS and ask for first-time abatement — works well for individuals and small businesses with clean records.
Send a written request with a reasonable cause explanation.
File Form 843 for more formal requests, especially for larger amounts or complex situations.
⚠️ Tip: Make sure your tax filings are current before you request abatement — they won’t consider it if you’re not in compliance.
🚀 Want Help Writing Your Request?
If you're not sure what to say — or how to say it — I've created a DIY Penalty Abatement Request course just for small business owners. It includes:
✅ A fill-in-the-blank request letter
✅ A Reasonable Cause Checklist
✅ A quick guide on when and how to use Form 843
✅ Email templates if you're working with a tax pro or calling the IRS
🙌 You Don’t Have to Pay Every Penny
IRS penalties are scary, but they’re not always final. With the right approach and a little paperwork, you may be able to reduce what you owe — or at least stop the penalties from piling up.
If DIY feels overwhelming, I offer 1:1 tax resolution services for business owners who want a professional in their corner.
Learn how to remove IRS late filing or payment penalties with this step-by-step DIY course for small business owners. Includes letter templates, Form 843 guide, call script, checklists, and video lessons to help you confidently request penalty relief — no tax prep required.
