Updated: August 17, 2024

By: Charles P. Corsello, EA|Reviewed by: Kari Brummond, EA

Sample IRS Penalty Abatement Request Letter

sample IRS penalty abatement letter

You can write a letter to the IRS to request penalty abatement. To help you out, we have provided sample letters that you can use to request waivers of several different types of IRS penalties. Simply copy these letters into a word processing program. Then, customize them with your own details, print, add attachments, and send to the IRS.

To get guidance through the process, use TaxCure to find a local tax professional today.

Key Takeaways

You can write a letter to the IRS to request relief from late filing, late payment, late deposit, and late information return penalties.
Make sure you meet the payment and compliance requirements before sending your letter.
Use a sample penalty waiver letter to ensure you include the right information.
Copy a sample penalty waiver letter into your word processing software and then customize the letter with your details.
If you don't want to write a letter, call the IRS or file Form 843.

What to Do Before Requesting Penalty Abatement

The IRS will only give you penalty abatement if you are currently compliant with your tax requirements. Before writing a letter to request a penalty waiver, do the following:

File unfiled returns - Generally, the IRS will not approve your request for penalty abatement if you have outstanding tax returns. Make sure to file your old returns. If you are several years behind, you usually only have to file the last six years but talk with a tax professional to learn about the best option in your situation.
Make a plan to avoid penalties in the future - Typically, you incur penalties when you're unable to pay your taxes in full or you file late. To avoid a tax bill at filing time, increase how much your employer withholds from your check by filing a new W4. If you're self-employed, make larger quarterly payments and talk with a tax pro to make sure you're optimizing your tax situation. If you filed late, pay closer attention to the deadlines next year and find strategies to help you avoid procrastination.
Set up a payment plan - You don't necessarily need to set up a payment plan to get penalty relief. As of 2023, the IRS ended this requirement. However, if you don't set up payments or pay off the balance in full, penalties will continue to accrue on your account, and you won't get the full effect of the waiver. Setting up a payment plan will reduce the failure to pay penalty to just 0.25% per month.

In almost all cases, you should make payment arrangements on the tax debt before you request penalty waivers, even if you're not required to. To give you an example, imagine that you incurred failure-to-pay penalties for $1,000 on your account. You requested first-time penalty abatement, and the IRS waived the penalties. However, you didn't make payment arrangements on your tax debt, and thus, the IRS continued to assess the failure-to-pay penalty at a rate of 1% per month. On a $10,000 tax bill, that's $100 per month, and it will continue to get added to your account until you make payment arrangements.

Sample Letter for Requesting First-Time Penalty Abatement (FTA)

You can request first-time penalty abatement on the following penalties:

Failure to file penalties (aka late filing penalties)
Failure to pay penalties (aka late payment penalties)
Failure to deposit penalties (penalties applied to employers who deposit payroll taxes late)

Here is a sample letter that you can use. Replace the notes in brackets with your info. Note that when you say you have not incurred any penalties for the last three years, that does not include penalties for underpaying estimated tax payments.

Additionally, in cases where you were not required to file for all of the last three years, you just need to be compliant during the period when you were required to file. For example, if you are a business owner who's only been required to deal with payroll taxes for the last two years, you can just note two years instead of three.

[Date]

Internal Revenue Service

[Address 1]

[Address 2]

[City, State ZIP]

Re:

[Taxpayer name]

Taxpayer identification number]

[Tax form and tax period]

To Whom It May Concern,

[I/We] [am/are] writing to request the [failure to file, failure to pay, or failure to deposit] penalty be abated based on IRM 20.1.1.3.6.1. This is in reference to the [type of penalty] in the amount of [amount] related to Form [tax form number] for the [year or quarter] tax period.

[I/We] believe [I/we] meet the criteria for requesting FTA in regards to the [failure to file, failure to pay, or failure to deposit] because of the following reasons:

1) Compliant with Filings - [I/We] have filed all required returns or extensions and do not have any outstanding tax returns.
2) Three-Year Clean Penalty History - [I/We] have not incurred tax penalties for the three prior years.
3) Compliant With Payments: [I/We] have paid all my taxes due, or set up an installment agreement.

Thank you for your consideration. If you have any questions or need any additional information, you can reach me at [phone number].

Best,

[Your Name]

Sample Letter to Request Penalty Waiver for Reasonable Cause

You can apply for penalty waivers based on reasonable cause for failure-to-file penalties, failure-to-pay penalties, penalties related to informational returns, and accuracy-related penalties. The IRS is willing to entertain different "excuses" for each of these penalties.

For failure to file or pay (aka late filing and late payment penalties), the IRS considers events like fires, natural disasters, deaths, serious illnesses, unavoidable absences, inability to get records, and system issues that prevented e-filing as reasonable cause.

If you're dealing with an accuracy-related penalty which occurs when you significantly understate your income on your tax return, the IRS will consider the complexity of the tax issue, your knowledge/experience about tax law, steps you took to understand your obligations, and what you did to correct the issue.

For information return penalties, you may be able to get a reasonable cause waiver if you acted in a responsible manner by requesting extensions, correcting the issue as quickly as possible, and making efforts to avoid this issue in the future. You must also prove that mitigating circumstances such as lack of access to records, actions from the IRS, or economic hardship caused you to file late.

Here is a sample letter that you can use to request penalty relief for reasonable cause.

[Date]

Internal Revenue Service

[Address 1]

[Address 2]

[City, State ZIP]

Re:

[Taxpayer name]

Taxpayer identification number]

[Tax form and tax period]

To Whom It May Concern:

I am writing to request an abatement of [type of penalty] in the amount of [amount] as assessed in the attached notice that is dated [month/day/year]

The reason why I _________(pick one)

paid late
filed late
failed to deposit
received an accuracy-related penalty

was because ____________ (pick one)

I had a serious medical condition
my house burned down
my documents were stolen
a close family member died
Any other reason that prevented you from complying with the IRS requirements. If dealing with an accuracy-related penalty, consider having a tax pro help you write the reasons.

Please find the enclosed______ (describe your supporting documents)

death notice of a family member
letter from a doctor stating the conditions of your illness that prevented you from filing or paying
picture of the house burned down in the fire
insurance notice of theft of private property and documents
Any other proof or supporting documents

Please accept my petition for abatement of penalties owed for reasonable cause based on IRM 20.1.1.3.2. If you have any questions or need any additional information, you can reach me at [phone number].

Sincerely,

Your signature

Note: You do not need to include a tax payment with your letter. However, if you have the money, it is a good idea. It may even help your case. When you send your supporting documents, make sure to only send copies. The IRS is known for “losing” documents.

Partnership Late Filing Penalty Abatement Letter Sample

If you file your Form 1065 partnership return late, you will incur a penalty for late filing of an information return. Most IRS penalties for filing late are based on the amount of tax due on the return. However, partnership tax returns don't have a balance due (they just show income that ultimately gets reported on each partner's individual tax return), and thus, rather than charging a percentage of the tax, the IRS assesses a flat penalty on these late returns.

You cannot request first-time abatement on partnership late filing penalties. However, you can request abatement for reasonable cause. Use the reasonable cause sample penalty abatement letter above if you need a sample letter for a partnership late filing penalty.

When modifying the sample letter, be sure to note that the IRS considers different factors when it comes to partnership late penalties. If you filed late due to a natural disaster, death, or illness, please note that, but then, also explain other factors such as what you did to avoid being late and how you're going to ensure that you file on time next year.

FAQs About IRS Sample Letters to Waive Penalties

How do you write a letter to the IRS so they waive penalties?

Explain which penalties you want removed. Outline why you qualify for first-time abatement or reasonable cause. Attach documents that support your statements, if relevant. To make the process easier, start with a sample letter to the IRS to waive penalties and then customize it with your own details.

What is an example of a penalty abatement request letter?

The two letters above show you a sample of what you should write if you want the IRS to remove penalties for your account. To get help with the process, talk with a tax professional who has penalty abatement experience.

How do I get the IRS to waive penalties?

You can write a letter to the IRS, you can call and ask for abatement, or you can file Form 843 to request penalty relief. A tax pro can also contact the IRS on your behalf.

Are there tips to help with penalty abatement?

On Quora, a former IRS employee weighed in on the best way to get penalties abated. She simply said to be nice. She wrote that if people call in and are rude, the IRS employee will fill out the penalty abatement request, but she continued to say that if the taxpayer is polite, the employee will fill out the request and also look for loopholes to help the taxpayer. Keep this tip in mind when writing your letter and/or if you call the IRS about the penalty waiver.

Are there other ways the IRS will forgive taxes owed?

The IRS doesn't necessarily advertise forgiveness programs, however there are some solutions that allow the taxpayer to pay less than the total amount owed. Below is a brief overview of these options.

Offer in Compromise: To qualify, you need to meet specific requirements, and even then, the IRS still may deny your offer. Generally, with this option, you must prove to the IRS that you will never have the means to pay them the taxes you owe before the statute of limitations expires.
Partial Payment Installment Agreement: This option allows you to pay a lower monthly amount than a standard installment agreement. Generally, the amount that is paid monthly will not pay off the entire balance of the taxes due before the statute of limitations expires on the debt.
Currently Not Collectibe Status: You can prove to the IRS that you don't have the means to pay the taxes owed. If you did pay what you owed, even in an installment agreement, this would cause financial hardship. Once in this status, the IRS does not require you to make payments. The taxes are still technically owed, but no collection actions will happen other than a possible lien filed and penalties and interest accruing. The statute of limitations may expire before someone gets out of this status. The IRS will require taxpayers to pay if their financial situation improves.

Help With Penalty Abatement Using TaxCure

At TaxCure, we have a large network of professionals from around the country who can help with a wide variety of tax problems. We have a unique algorithm to help display only professionals who have the experience to help with your particular problems. If you are looking for assistance from a tax professional who has penalty abatement experience, you can use this link to view the top-rated pros who can help, or you can start a search below:

Disclaimer: The content on this website is for educational purposes only. It does not serve as legal or tax advice. For specific help regarding your tax situation, contact a licensed tax professional or tax attorney.