IRS Form 843 is a tax form used to request a refund or abatement for certain taxes, penalties, interest, or fees. This is the form you fill out to request that the IRS eliminate or reduce your penalties if you have reasonable cause or are eligible for the first-time penalty abatement.
While filing Form 843 is straightforward, taxpayers struggle to explain and substantiate their eligibility for the penalty abatement (Line 8 of the form). As a result, their offer is rejected even when they have a valid, reasonable cause. In this guide, we will cover how to complete Form 843 and offer tips for answering Line 8 to increase your approval rate.
Before you even learn how to fill the form, find out if your penalties qualify for abatement.
Key Takeaways
- IRS Form 843 – The form used to request penalty relief on the basis of First Time Abate or reasonable cause.
- Types of penalties that can be abated – In most cases, failure to file, failure to pay, failure to deposit, and accuracy-related.
- Why Line 8 is critical – It’s the section where you give the explanation and evidence of why you’re eligible for penalty relief.
- Appealing a penalty relief denial – Taxpayers can file an appeal with the IRS Independent Office of Appeals within 30 days of the rejection letter.
- Getting help from a tax pro – Talking to a tax professional can help when completing Form 843, especially when completing Line 8.
What is IRS Form 843?
IRS Form 843 is used to claim a refund and request an abatement. You can use this form to request the IRS to reduce penalties, interest, and fees.
For example, if you’ve been tax compliant for years and you missed filing or paying your taxes on time, you can file the form to request a first-time abatement. You can also use the form to request penalty relief if you had a serious illness that stopped you from filing or paying your taxes on time. We shall discuss more about who qualifies for penalty abatement later in this guide.
You can also use this form to request refunds, such as excess social security, RRTA tax your employer withheld, Medicare, etc. However, in this guide, we will focus on how to fill out Form 843 for penalty abatement.
What Penalties Can Be Reduced With Form 843?
There are several types of penalties that can be abated with Form 843, but these are the most common penalties that Form 843 is used for are:
- Failure to file: This is the penalty you incur for not filing your tax return by the due date. The penalty is usually 5% of the unpaid tax debt per month, or the part of the month that the return is late, and it can accrue up to 25%.
- Failure to pay: This penalty applies when you fail to pay your taxes by the due date. It’s usually 0.5% of the unpaid tax debt per month, or the part of the month that the return is late, and it can increase up to 25%.
- Failure to deposit: This is the penalty employers incur when they fail to deposit federal taxes, such as payroll taxes, by the required due date. The penalty ranges from 2% to 15% of the unpaid deposit, depending on how late the deposit is made.
- Accuracy-related: This penalty occurs when you underpay your taxes because of negligence, disregard of IRS tax rules, or a substantial understatement of income. The penalty is usually 20% of the underpaid portion of the tax.
- Interest abatement: The IRS can eliminate the interest that the penalty abated incurred. You can also request interest abatement if the interest was caused by IRS errors or delays in performing a ministerial or managerial act, as provided under Internal Revenue Code Section 6404(e).
Two Types of Penalty Abatement You Can Request
Whether your penalty request is accepted or rejected heavily depends on this section. Your WHY is everything when requesting penalty relief from the IRS. Let’s expound on when it’s appropriate to request a first-time abatement and when reasonable cause is the better option.
First Time Abatement (FTA)
First-Time Abatement (FTA) is an administrative waiver that can be applied to failure-to-file, failure-to-pay, or failure-to-deposit penalties. To qualify for FTA, you have to meet all the filing and payment requirements. You must:
- Have filed all the required tax returns for the preceding three years before the penalty you’re requesting relief for was assessed.
- Have no penalty history for the previous three years, and if there was one, it must have been removed for a reason other than FTA.
However, the IRS is working on implementing an Automation Exemption from Penalty (AEP), which will automatically approve your FTA if you qualify. If this happens, you’ll receive a notice from the IRS stating that your penalties have been cleared.
Reasonable Cause
You can have your penalties removed if you prove that you couldn’t file or pay your taxes because of circumstances beyond your control (reasonable cause). The IRS evaluates these requests on a case-by-case basis to determine eligibility, which is why the written agreement is critical in this application (more on this in the next section).
Examples of reasonable cause include:
- A natural disaster or civil disturbance.
- Death or a serious medical issue of an immediate family member.
- Unavoidable absence of the taxpayer.
- Inability to obtain necessary records.
- Tax system issues that made electronic filing or payment temporarily impossible.
The following are examples of reasons that typically don’t qualify as reasonable cause:
- Relying on a tax professional to file or pay taxes on time on behalf of the taxpayer.
- A taxpayer not realizing they had a tax filing or payment obligation.
- Simple mistakes or oversights where the taxpayer didn’t make a sufficient effort to avoid the mistakes or oversights.
- Not having enough money to pay the required tax when due.
How To Fill out IRS Form 843
Note: The IRS occasionally updates its paperwork. For this example, we will use the December 2024 revision of Form 843. If you are filing a newer version, the line numbers may vary slightly, but the overall required information remains the same.
Step one: Under penalty, select the “Abatement or refund of a penalty or addition to tax due to reasonable cause or other reason allowed under the law” box.
Step Two: Enter your personal details correctly (Your name, SSN, address, etc)
Step Three: Fill in the form as follows:
Line 1: Enter the specific tax period. For example, for individual income tax, it should be a calendar year (e.g., 01/01/2025 to12/31/2025).
Line 2: Enter the amount you want abated. You can find this on IRS notices, such as CP14.
Line 3: This is for refunds, so you don’t need to fill it out when you’re applying for penalty relief.
Line 4: Check the box that applies to the type of tax involved. For example, for income taxes, you choose e (income).
Line 5: Choose the form that represents the tax return form you’re working with. In our example of an individual income tax return, we will choose i(1040).
Line 6: You need to identify and add the Internal Revenue Code (IRC) of the penalty you’re seeking to get removed. Here are the codes:
- Failure to File: IRC Section 6651(a)(1)
- Failure to Pay: IRC Section 6651(a)(2)
- Failure to Deposit: IRC Section 6656
Line 7: Check the box to indicate whether you’re requesting a refund or an abatement. Whether you’re applying for a reasonable cause or FTA, you’ll choose: “ Reasonable cause or other reason allowed under the law can be shown.”
Line 8: This is where you explain why the IRS should offer your penalty relief, which makes it the most critical part of the application.
Lastly, remember to sign your application.
Why the Explanation Section Is Important (Line 8)
Line 8 is where you explain why you’re requesting a penalty relief. This explanation can break or make your application. The IRS frequently denies requests here because taxpayers fail to provide specific facts and substantial evidence of their reasonable cause. Since the IRS receives thousands of penalty abatement requests, vague and generic explanations are rejected.
Here are mistakes that people make when writing an explanation:
- Giving overly emotional explanations instead of stating facts.
- Vague or generic explanations like “ I wasn’t feeling well during the tax season” instead of “I was hospitalized from April 2, 2026, through April 18, 2026.”
- Leaving out key facts. For example, if there was a fire, don’t just say it was a fire. Explain how that affects your compliance. Did all your documents burn? Where did you stay? What have you done to get the replacements? Be detailed.
- Forgetting the legal basis, e.g., showing that you acted reasonably even though the situation was out of your control. You have to show your cause fits the IRS description.
Where To Mail Form 843
The mailing address depends on your residence and the type of tax you are disputing. Always check the Instructions on the official IRS website for the most recent “where to file” addresses, as they change frequently.
We also recommend sending Form 843 by certified mail, return receipt requested, to create a paper trail. Here is where to mail Form 843, depending on the situation.
Where to Mail Form 843 |
|
|---|---|
| Situation | Where to mail the 843 form |
| You’re responding to an IRS penalty notice | The return address on the notice |
| You want penalty abatement but haven’t received a notice | The address where you mail the tax return related to the penalties you incurred |
What To Do If the IRS Denies the Request
If the IRS rejects your Form 843 penalty abatement request, you can file an appeal with the IRS Independent Office of Appeals. The rejection letter should include instructions for requesting this appeal, and you’ll typically have 30 days from the date of this letter to appeal.
Request Penalty Abatement with IRS Form 843
For some tax issues, simply figuring out how to file a form is the hardest part. However, when requesting penalty abatement with Form 843, completing the form is the easy part. The hard part comes with figuring out how to present the most compelling arguments possible, especially when applying on the basis of reasonable cause.
That’s where Tax Network USA comes in to assist taxpayers like you in presenting the strongest arguments to the IRS, all while backed by supporting facts and documents. Schedule a free consultation to discuss your penalty abatement options through our online contact form or by calling (855) 225-1040.
IRS Form 843 Penalty Abatement FAQs
Do you need to have a payment plan to request penalty abatement?
You don’t need to have a payment plan or installment agreement in place to request penalty abatement or refund, but that’s if you’ve already paid the underlying tax bill in full. If there’s an outstanding balance, then having a payment agreement in place will increase your chances of the IRS accepting your penalty abatement request.
How long does it take for the IRS to process Form 843?
The exact timeline depends on the complexity of your arguments and the IRS’s current workload. That said, expect at least a few months after filing Form 843 before the IRS makes a decision. Don’t be surprised if it takes up to six months, though.
Can Form 843 be used to reduce interest as well as penalties?
Yes, you can request an interest refund or abatement if the IRS made a qualifying error or delay that led to the interest.
What’s the deadline for filing Form 843?
The amount of time you have depends on the basis for the penalty relief request. You’ll generally have three years from the date you filed your original return or two years from the date you paid the tax, whichever is later.
What happens if you miss the filing deadline for Form 843?
Missing the filing deadline could result in you no longer being eligible for the penalty relief you seek.
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