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What Is a Reasonable Cause for Tax Penalty Abatement?

Many people who get behind on their taxes are shocked when they see that their bills have been dramatically increased due to penalties and interest. In some cases, the penalties and interest fees can make what was an affordable bill suddenly unaffordable.

If you have good cause for being late on filing or paying your taxes, the IRS or the state may agree to remove some of the penalties. In some cases, they can even be persuaded to remove all of the penalty fees. First, you will need to show reasonable cause. So, what is a reasonable cause for tax penalty abatement?

Reasonable Causes the IRS or State Will Accept for Penalty Abatement

The government defines reasonable cause as a substantiated reason for failure to pay or file your taxes on time, with the reason being out of your control—for example, if you failed to file your taxes on time because all of your records were burned up in a fire.

Another reasonable cause for not filing or paying on time is if you were unable to obtain all needed documents, but you made every effort to do so. In other words, you can prove that you made efforts to obtain the documents but weren’t able to do so because of reasons you couldn’t control. For instance, maybe you worked at a business and they have not provided you with your W2s, but you’ve tried to track them down and have thus far been unsuccessful.

Another example of reasonable cause is if you or a family member has suffered a serious injury or illness, or you’ve been dealing with a death in the family that has prevented you from submitting your taxes.

The government generally accepts any other cause that you can back up with evidence. Lack of financial ability to pay is not considered a reasonable cause for not paying your taxes.

Partner with a Tax Penalty Abatement Attorney

Now you have a better sense of what a reasonable cause for tax penalty abatement is. If you believe you qualify for penalty abatement, or you simply need assistance with another tax matter, get in contact with The W Tax Group. Claim your free tax debt analysis today by calling 877-500-4930 or by filling out the form down below.