| If you owe the IRS tax debt, you probably cannot pay | | | | - An error was made |
| it, as well as the penalties and interest that were | | | | - Ignorance of the law |
| automatically added to it by the IRS computer system. | | | | The IRS will really accept any reason as long as it |
| Depending on the personal situation, there are options | | | | shows that you exercised business care and |
| around this IRS problem. | | | | prudence but was unable to comply with your tax |
| Reasonable Cause | | | | obligations. |
| If you can prove reasonable cause, the IRS may | | | | Penalty Abatement Request |
| lessen or abate your penalties. What does reasonable | | | | If you receive a bill with penalties, reply promptly and |
| cause mean? The IRS's definition is: "reasonable cause | | | | ask for an abatement. You can write your own letter |
| relief is generally allowed if the person practices | | | | or fill out IRS Form 843 (Claim for Refund and |
| ordinary business care and prudence in determining his | | | | Request for Abatement). Remember to include a |
| tax obligations but isn't able to meet those obligations". | | | | copy of your notice showing the penalties and |
| By proving to the IRS in logical and legal ways that you | | | | documents supporting your reasonable cause. If |
| tried to pay your taxes by the deadline but was | | | | possible, attach payment of the debt which includes a |
| prevented by circumstance, you're showing reasonable | | | | note specifying that the payment is to go toward the |
| cause. | | | | tax and not the penalties and interest. You can also |
| Here is a list of some of the events that the IRS | | | | make a note of this on the check. (If you settle the tax, |
| considers reasonable cause: | | | | the interest will stop accumulating.) Subsequent billings |
| - Acts of God | | | | may be served before you get a reply, so make |
| - Fire, natural disaster, casual, or other disturbance | | | | many duplicates of the abatement request and its |
| - Wrong advice from the IRS | | | | supporting documents. |
| - Tax professional provided wrong advice | | | | Remember that you'll be unable to file another request |
| - Records weren't obtained | | | | with the same reason if your penalty abatement |
| - Death, serious sickness, or unavoidable absence | | | | request is denied. |
| - Forgetfulness | | | | |