How to File for an Abatement of Penalties & Interest With the IRS
If you believe the IRS has charged penalties and interest in error, or due to circumstances not your fault, you may qualify for an abatement. However, even if the IRS grants your request, you will still have to pay the principal on taxes you owe. If the IRS does not grant your abatement request, the interest you owe will continue to accrue during the time they are considering your request.
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Instructions
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Complete Form 843 if you are requesting an abatement of interest or penalties due to IRS error, or delay in answering a question that would have provided the information you needed to file and pay on time. IRS delays and errors include "managerial acts," which could involve IRS agents losing or misplacing your records, or "ministerial acts," which could involve IRS agents providing you with an incorrect balance on which you have been accruing interest. Indicate the type of tax and provide an explanation why you believe you do not owe the penalties and interest. Attach additional sheets, if necessary.
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Attach documentation to Form 843 to support your case. If the IRS made a mistake or provided you with erroneous advice, provide a copy of the incorrect information you received from them. If your penalty was assessed because of an IRS delay in respopnding to a question, attach a dated copy of your request for information, as well as a dated copy of their delayed response.
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Write a letter to the IRS if you are requesting an abatement due to circumstances beyond your control that Form 843 does not cover, such as a medical emergency or death in the family. Include the reference numbers on the interest and penalty notice you received. Attach copies of paperwork to support your case, such as medical bills or death certificates. Your written request for an abatement will be granted, regardless of the reason, if you have never before incurred a penalty or if you have not incurred a penalty during the previous three years.
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Tips & Warnings
Pay your balance, if possible, even if you believe you are being charged in error while you continue to pursue your abatement request. If your request is granted, the IRS will refund your money. If your request is denied, you will save yourself additional interest. The IRS denial letter will explain your appeal rights, should you choose to exercise them.
References
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