What Is Typically Included in a Penalty Abatement Letter?


Quick Answer

A penalty abatement letter to the Internal Revenue Service typically includes contact information of the taxpayer, details about the penalty, the reason for the abatement request and a list of documentation to support the request, reports BackTaxesHelp. The taxpayer should also fill out and enclose IRS Form 843, Claim for Refund and Request for Abatement. If possible, the taxpayer should enclose a payment for taxes that the taxpayer owes.

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Full Answer

At the top of the penalty abatement letter, the taxpayer should include the date and below that his name, address and Social Security number, advises BackTaxesHelp. The first paragraph should contain the amount of the penalty, the date of the penalty letter and the reason the IRS imposed the penalty. The following paragraph should explain the legitimate reason for the late return, late payment or failure to report income that prompted the penalty. Documents to back up the reason may include statements from medical practitioners, death certificates or photographs of the consequences of natural disasters.

Reasons for penalty abatement must demonstrate that the taxpayer showed normal business care but was still unable to comply with tax regulations, explains the IRS. Legitimate excuses may include the death, sickness or absence of the taxpayer or a member of his family. Other valid reasons include fires, natural disasters, inability to obtain official records, erroneous advice or ignorance of the law. Forgetfulness is not typically grounds for penalty abatement. In evaluating penalty abatement requests, the IRS considers a taxpayer's general tax compliance history and the amount of time between the emergency that prompted noncompliance and the taxpayer's subsequent effort at compliance.

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