Penalty Relief from the IRS Due to Reasonable Cause

Penalty Relief from the IRS Due to Reasonable Cause

You’ve made every effort to fulfill your obligations to the IRS, and yet, you find yourself burdened with major penalties. Relief may be available on the basis of reasonable cause. This solution isn’t available to everyone, however, and proving your eligibility may be more complicated than you assume. To streamline the process, we’ve broken down the basis of IRS reasonable cause relief below:

What Qualifies as Reasonable Cause?

The IRS often makes special accommodations for taxpayers dealing with unusual circumstances. Known as reasonable cause, this form of relief is meant for well-meaning individuals who have exercised “ordinary business care and prudence.”

In other words: if you’ve made an effort to comply with tax requirements but have still fallen short due to circumstances beyond your control, relief may be available.

Examples of situations that qualify under the IRS definition of reasonable cause include:

  • Fires or natural disasters
  • Death, serious illness, or other forms of incapacitation
  • Genuine inability to secure access to required records

Proving Reasonable Cause

If you believe that your case qualifies as reasonable cause, you’ll need to submit extensive proof to the IRS. For example: if you’re seeking relief on the basis of serious illness or injury, hospital records may be sufficient. In other cases, you might need court records or documentation of natural disasters. Neglect to provide these, and you may find it difficult to obtain the relief you require.

If you’re determined to get relief, it’s in your best interest to work with a tax professional. An enrolled agent can help you gather and submit the documentation needed to get your request approved.

Do you think you might be eligible for penalty relief from the IRS? Look to the Highland Tax Group for guidance. We’ll help you determine whether you qualify — and we can improve your odds of getting relief. Contact us today to get started.