What is Reasonable Cause Relief?

Reasonable Cause Relief is IRS penalty relief that may reduce or remove certain penalties when a taxpayer can show they acted with reasonable cause and, where required, in good faith.

The IRS evaluates the taxpayer’s specific facts and circumstances rather than applying one automatic standard to every case.

For failure-to-file or failure-to-pay penalties, you may qualify for reasonable cause if you acted with ordinary care but still couldn’t file or pay on time.

Reasonable cause doesn’t apply to all IRS penalties - the rules vary by penalty type.

See the IRS guidance on Reasonable Cause Penalty Relief.

What Qualifies as Reasonable Cause With the IRS?

Reasonable cause generally exists when circumstances prevented a taxpayer from complying even though the taxpayer took reasonable steps to meet the obligation.

The IRS evaluates each request individually. The relevant standard can also vary depending on whether the issue involves filing, payment, reporting, or an accuracy-related penalty.

Factors the IRS Considers

Depending on the penalty, the IRS may consider:

what happened and when it occurred;
how the event affected the taxpayer’s ability to comply;
what efforts were made to meet the obligation;
whether the taxpayer acted promptly after the problem ended;
whether the taxpayer took steps to prevent the problem from recurring; and
whether the taxpayer acted in good faith where that standard applies.

For an accuracy-related penalty, the IRS may also consider the complexity of the tax issue, the taxpayer’s education and experience, efforts to determine the correct tax, and reasonable reliance on professional advice.

What are Common Examples of Reasonable Cause?

Certain events may support reasonable cause when they directly prevent a taxpayer from meeting a tax obligation.

Circumstance	Why It May Support Reasonable Cause
Serious illness or death	The event may prevent the taxpayer from managing filing or payment responsibilities.
Fire, casualty, or natural disaster	Disruption, property loss, or inaccessible records may interfere with compliance.
Unavoidable absence	The taxpayer may be unable to handle the tax obligation during the relevant period.
Inability to obtain records	Required information may remain unavailable despite reasonable efforts to obtain it.
Other circumstances beyond the taxpayer’s control	An unexpected event may prevent compliance despite reasonable precautions.

These circumstances do not automatically qualify a taxpayer for relief. The IRS considers whether the event actually caused the failure and whether the taxpayer acted reasonably before, during, and after the event.

Which IRS Penalties May Qualify for Reasonable Cause Relief?

Reasonable cause may apply to several federal tax penalties, but the requirements differ by penalty.

Potentially relevant categories include:

Failure-to-file penalties;
Failure-to-pay penalties;
Certain accuracy-related penalties; and
Certain information-return penalties.

Reasonable Cause for Information-Return Penalties

For certain information-return penalties governed by IRC §6724, reasonable cause generally requires a two-part showing.

The filer must demonstrate that:

They acted responsibly before and after the failure; and
The failure resulted from significant mitigating factors or events beyond their control.

The IRS may consider whether the filer tried to prevent a foreseeable failure, corrected the problem promptly, and took steps to prevent it from happening again.

See the IRS discussion of reasonable-cause standards for information returns in the Internal Revenue Manual.

Because reasonable-cause standards are penalty-specific, taxpayers should identify the rule governing the particular penalty before requesting relief.

When Does Reasonable Cause Relief Not Apply?

A difficult circumstance does not automatically establish reasonable cause.

For example, lack of funds alone is generally not reasonable cause for failing to pay or deposit tax.

Other facts may still matter if they show that the taxpayer exercised reasonable care and made genuine efforts to comply.

Reasonable cause is also unavailable for some penalties that follow separate statutory waiver rules.

One example is the estimated tax penalty, which generally follows separate exceptions and waiver provisions rather than the standard reasonable-cause framework.

Routine oversight, forgetting a deadline, or simply transferring responsibility to another person may also fail to establish reasonable cause where the taxpayer remained legally responsible for complying.

Can Reliance on a Tax Professional Establish a Reasonable Cause?

Reliance on professional tax advice can support reasonable cause in some situations, especially when an accuracy-related penalty involves a complex or substantive tax issue.

For an accuracy-related penalty, the IRS may consider whether the taxpayer:

Provided the adviser with complete and accurate information;
Selected an adviser with appropriate competence and experience; and
Reasonably relied on the advice provided.

However, reliance on a tax professional generally does not establish reasonable cause for failure-to-file or failure-to-pay penalties. Taxpayers remain responsible for knowing whether a return must be filed, when it is due, and whether tax must be paid.

The IRS explains this distinction in its Reasonable Cause Penalty Relief guidance.

How Do You Request Reasonable Cause Relief?

A taxpayer should generally begin by following the instructions on the applicable IRS notice or letter.

Some requests can be handled by contacting the IRS using the phone number shown on the notice. The taxpayer should identify the penalty and clearly explain why the circumstances prevented compliance.

If the matter cannot be resolved through the initial contact process, the IRS may require a written request or supporting documentation.

What Information and Documentation Should You Provide?

A reasonable-cause request should connect the event directly to the tax failure.

Relevant information may include:

The penalty and tax period involved;
What happened;
When the circumstance began and ended;
How it prevented compliance;
What steps were taken to meet the obligation;
When corrective action was taken; and
Evidence supporting the explanation.

Depending on the circumstances, supporting records may include medical documentation, disaster records, correspondence, receipts, tax records, or other evidence showing why timely compliance was not reasonably possible.

When is Form 843 Used?

Form 843, Claim for Refund and Request for Abatement, may be used to request an abatement or refund of certain penalties, additions to tax, interest, fees, or other amounts when permitted by law.

However, Form 843 is not a universal tax-adjustment form.

According to the Instructions for Form 843, it generally cannot be used to:

Request abatement of income, estate, or gift tax;
Request a refund of income tax or Additional Medicare Tax;
Amend a previously filed income tax return;
Amend employment tax returns; or
Claim certain employment tax refunds or abatements when a designated adjusted return is required.

Employers generally must use the appropriate adjusted employment tax form, such as Form 941-X, Form 943-X, or another applicable “X” form, when correcting employment taxes.

Taxpayers should follow both the applicable IRS notice and the official Form 843 instructions before filing.

Does Reasonable Cause Relief Remove Penalties and Interest?

Reasonable cause relief addresses the penalty, not the original tax liability.

If the IRS removes or reduces a penalty, interest attributable to that penalty is generally adjusted as well.

However, interest charged on unpaid tax follows separate rules and may remain due even after the penalty is removed.

In simple terms:

Penalty relief → may remove the penalty and related penalty interest.

Penalty relief → does not automatically eliminate the underlying tax or interest charged on that tax.

Reasonable Cause Relief vs. Administrative Penalty Relief

Reasonable cause and administrative penalty relief are different ways to obtain IRS penalty relief.

Reasonable cause relief depends on the taxpayer’s individual facts, circumstances, and efforts to comply.

Administrative penalty relief depends on defined IRS eligibility rules and compliance history.

In summer 2026, the IRS began introducing the Automatic Exemption from Penalty (AEP) as the replacement for the longstanding First Time Abate (FTA) system.

AEP applies to eligible original returns beginning with tax year 2025, eligible 2026 quarterly returns, and future qualifying periods.

During the transition:

FTA can still apply to certain eligible 2024 tax-year returns;
FTA may still apply to certain 2025 quarterly returns;
Some eligible 2025 tax-year returns processed before AEP begins may still qualify under FTA; and
Some eligible 2026 quarterly returns processed before AEP begins may also remain under the transition rules.

For eligible original returns with due dates on or after January 1, 2027, FTA is no longer available, and AEP becomes the applicable administrative relief program.

Taxpayers who do not qualify for AEP may still request reasonable-cause relief when the specific penalty permits it.

What Happens If the IRS Denies Reasonable Cause Relief?

A denied reasonable-cause request may be eligible for further administrative review.

The taxpayer should first review the denial notice to determine whether appeal rights are available. If eligible, the taxpayer may request review through the IRS penalty appeal process.

An appeal should address the penalty-specific standard and explain why the documented facts support reasonable cause.

Reasonable Cause Relief: Key Takeaway

Reasonable Cause Relief may reduce or remove certain IRS penalties when circumstances prevented compliance despite reasonable efforts to meet a tax obligation. Eligibility depends on the specific penalty, the event that caused the failure, the taxpayer’s conduct, and the evidence supporting the request.

Reasonable Cause Relief FAQs

Can you request reasonable cause relief after paying an IRS penalty?

Yes. A taxpayer may seek a refund of certain paid penalties when permitted by law. Form 843 may be used for certain refund or abatement claims, subject to the applicable filing and limitation rules.

Is there a deadline for requesting reasonable cause penalty relief?

Yes. The deadline depends on whether the taxpayer seeks abatement of an unpaid penalty or a refund of a paid amount. Applicable refund, claim, and penalty rules determine the filing period.

Can a CPA or tax professional request reasonable cause relief for a taxpayer?

Yes. An authorized representative may communicate with the IRS and submit a penalty-relief request for a taxpayer when valid IRS authorization is in place.

Does reasonable cause relief affect future administrative penalty relief?

It can. A prior penalty that was later abated for reasonable cause does not automatically disqualify a taxpayer from future administrative relief. Current eligibility depends on the IRS rules for the applicable relief program and period.

Can the IRS approve only part of a reasonable cause request?

Yes. The IRS may evaluate different penalties, tax periods, or failures separately. Relief can therefore apply to one assessed amount while another penalty or period remains unchanged.