Tax Resolution: Reasonable Cause Penalty Abatement
If you’ve been hit with IRS penalties, you know how quickly they can add up—sometimes turning a manageable tax bill into a financial nightmare. The good news? You may qualify for a Reasonable Cause Penalty Abatement, which could reduce or eliminate those costly penalties.
At Janet M Sienicki LLC, we help taxpayers navigate the IRS’s strict guidelines and successfully request penalty relief. Read on to see if you qualify and how we can help!
What Is Reasonable Cause Penalty Abatement?
The IRS charges penalties for various reasons, including late filing, late payments, or underpayment of taxes. However, if you can demonstrate that you had a legitimate reason (i.e., “reasonable cause”) for not meeting your tax obligations, you may be eligible for penalty relief.
The IRS defines reasonable cause as situations where you exercised ordinary business care and prudence but were still unable to comply due to unforeseen circumstances.
Who Might Qualify for Reasonable Cause Abatement?
You may qualify for penalty relief if your failure to pay or file was due to:
✔ Serious illness, injury, or death – If you or an immediate family member were impacted, the IRS may consider this a valid reason.
✔ Natural disasters or other catastrophic events – Floods, fires, hurricanes, or other disasters beyond your control can be grounds for relief.
✔ Erroneous tax advice from a professional – If you followed incorrect guidance from a CPA or tax preparer, you may have a case.
✔ Significant financial hardship – If paying your tax debt on time would have caused extreme financial distress, the IRS might grant relief.
✔ Documentation errors or missing records – If events beyond your control (e.g., theft, loss of records) prevented you from complying, you may qualify.
Each case is evaluated individually, and strong documentation is required to prove your claim.
Example: How Reasonable Cause Abatement Works
Let’s say John, a self-employed contractor, suffered a major health crisis and was hospitalized for several months. During this time, he couldn’t file his tax return or make payments. As a result, he was hit with failure-to-file and failure-to-pay penalties, adding thousands of dollars to his tax bill.
With the help of a tax resolution professional John:
- Gathered medical records to prove his illness.
- Provided a timeline showing his inability to file or pay on time.
- Submitted a strongly written request for penalty relief.
The IRS approved his abatement request, eliminating thousands of dollars in penalties and allowing him to set up a manageable payment plan for his remaining tax balance.
How We Can Help
Applying for Reasonable Cause Penalty Abatement requires a well-prepared case, proper documentation, and strategic communication with the IRS. At Janet M Sienicki LLC, we:
✔ Evaluate your eligibility and determine the best approach.
✔ Prepare a compelling request with supporting documentation.
✔ Negotiate with the IRS to get the best possible outcome.
✔ Help you explore other tax resolution options if necessary.
If you or someone you know is struggling with IRS penalties, don’t wait—penalties continue to grow over time. Contact us today for a free consultation to see if you qualify for penalty abatement!