If the IRS rejected your request to remove a penalty, you may be able to request an Appeals conference or hearing. You have 30 days from the date of the rejection letter to file your request for an appeal.
You can file an appeal if all the following have occurred:
- You received a letter that the IRS assessed a failure to file and/or failure to pay penalty to your individual or business tax account
- You sent a written request to the IRS asking them to remove the penalty
- The IRS denied your request to remove the penalty (penalty abatement)
- You received a Notice of Disallowance, which gives you your appeal rights
For an overview of the penalty appeals process, see Publication 4576, Orientation to the Penalty Appeals Process (PDF).
The two most common penalties that Appeals may remove (abate) are penalties that can have a reasonable cause:
- Failure to file
- Failure to pay
Reasonable cause is relief we may grant when a taxpayer exercises ordinary business care and prudence in determining their tax obligations but is unable to comply with those obligations due to circumstances beyond their control.
The IRS can also remove (abate) penalties because of certain statutory exceptions and administrative waivers. You can learn more about these by visiting the Internal Revenue Manual Penalty Handbook (IRM 20.1.1):
- Section 22.214.171.124.3.1, Statutory and Regulatory Exceptions
- Section 126.96.36.199.3.2, Administrative Waivers
If you filed your return on time and want to file an appeal, send a copy of the proof that you filed your return on time with your written Appeals request. Refer to Requesting an Appeal for more information.
If you paid your taxes on time and want to file an appeal, you must provide proof that you paid your taxes on time by providing a copy (both front and back) of a cancelled check or other supporting documents. Refer to Requesting an Appeal for more information.
If neither of the situations above apply to you, then you don’t meet the reasonable cause criteria unless you exercised ordinary business care and prudence and there were circumstances beyond your control that prevented you from filing your return or paying your taxes on time. Internal Revenue Manual Penalty Handbook (IRM 20.1.1) explains such circumstances and provides details of information you can provide to support your position. Such circumstances include:
- Death, Serious Illness or Unavoidable Absence (refer to IRM 188.8.131.52.2.2.1)
- Fire, Casualty, Natural Disaster or other Disturbances (refer to IRM 184.108.40.206.2.2.2)
- Unable to Obtain Records (refer to IRM 220.127.116.11.2.2.3)
- Mistake Was Made (refer to IRM 18.104.22.168.2.2.4)
- Erroneous Advice or Reliance (refer to IRM 22.214.171.124.2.2.5)
If none of these situations apply to you, then you don’t meet the reasonable cause criteria. However, if you still want Appeals' consideration, send an explanation of the detailed facts and circumstances with your appeal request. Refer to Requesting an Appeal for more information.
Other Penalty Information
If you know you’re eligible to file an appeal and you just need to know how, visit Requesting an Appeal.
If you’d rather speak to someone about appealing a penalty, visit Let Us Help You or contact the person identified on the IRS letter you received.