Penalty rules differ by penalty and tax period. Follow the response instructions and deadline printed on the notice. A state, territory, or local tax penalty must be handled by that jurisdiction, not by the IRS.
1. Identify the penalty and tax period
Read the notice number, the penalty name, the Internal Revenue Code section when shown, the tax form, and the tax period. Confirm whether the amount is still unpaid or has already been paid. Save the notice, account transcript if available, filing proof, payment records, and prior correspondence.
Do not enter a Social Security number, employer identification number, bank information, notice number, or tax-return data on WhatDoIFile. Use sensitive information only through an official IRS channel or with an authorized representative.
2. Check whether automatic administrative relief applies
The IRS is rolling out the Automatic Exemption from Penalty (AEP) in summer 2026. For an eligible original return, AEP can prevent failure-to-file, failure-to-pay, or failure-to-deposit penalties from being assessed when IRS records show the required timely-compliance history. It begins with eligible 2025 tax-year returns and 2026 quarterly returns.
AEP is applied during original-return processing. No application or Form 843 is required when it works correctly; the IRS sends a notice explaining that the penalty was not assessed. AEP does not cover every return or penalty and does not remove unpaid tax, interest, or unrelated penalties.
First Time Abate (FTA) is being phased out. During the transition, FTA can still apply to certain earlier or not-yet-AEP-processed periods. If a notice assesses an otherwise eligible penalty and you believe your compliance history qualifies, contact the IRS using the number on the notice and ask it to review the account under the current administrative-relief rules.
3. Decide whether reasonable cause fits
Reasonable cause is separate from AEP and FTA. The IRS reviews all facts and circumstances and asks whether the taxpayer exercised ordinary business care and prudence but could not comply because of circumstances beyond the taxpayer's control. Examples the IRS may evaluate include serious illness, death, fire, disaster, inability to obtain records, or reliance issues.
Lack of funds by itself is generally not reasonable cause for failing to pay or deposit tax. The surrounding facts may still matter, including what happened, when it happened, how it prevented compliance, and what the taxpayer did to comply as soon as possible.
4. Request relief through the notice channel
Some requests can be resolved by calling the toll-free number at the top right of the IRS notice. Have the notice, the exact penalty, the reason for relief, and supporting records available. The IRS may apply the relief category supported by its records even when the taxpayer names a different category.
If the IRS cannot approve the request by phone, follow the notice to send a signed written explanation. The IRS may direct the taxpayer to use Form 843, Claim for Refund and Request for Abatement. The current form and instructions are revised December 2024.
5. Prepare a complete written request
- Identify the penalty, tax form, and tax period.
- State what happened, when it began and ended, and how it prevented timely filing, payment, or deposit.
- Explain the steps taken before, during, and after the problem.
- Attach relevant proof, such as hospital or court records, disaster records, correspondence, receipts, filing confirmations, or payment evidence.
- Use a separate Form 843 for each tax period or fee year when the form is required.
- Sign the request as required. Both spouses generally sign a Form 843 related to a joint return.
Form 843 is not the correct form for every tax adjustment or refund claim. Follow the form instructions and the notice; the IRS specifically says a person responding to a notice may not need Form 843.
6. Send it to the correct IRS address
When Form 843 responds to an IRS notice, the IRS filing table generally directs the taxpayer to the address shown on that notice. For other penalty requests, the destination can depend on the return and service center. Use the live IRS “Where to file Form 843” page instead of copying an address from an older form or guide.
Keep a complete copy and proof of mailing or other submission. Do not send an appeal directly to the IRS Independent Office of Appeals unless the IRS letter specifically instructs you to do so.
7. Appeal a denial when the letter gives appeal rights
If the IRS denies a written request and the rejection letter offers appeal rights, the taxpayer generally has 30 days from the date of that letter to request review by the IRS Independent Office of Appeals. The exact deadline and submission address are controlled by the letter.
Send the protest to the IRS office identified in the letter. Explain each disputed penalty and include supporting facts and documents. The originating IRS office considers the protest first and forwards unresolved eligible issues to Appeals.
What happens after the request
The IRS sends a decision or account-adjustment notice. If a penalty is reduced or removed, the IRS automatically reduces or removes the related interest attributable to that penalty. Interest on unpaid tax and other amounts generally continues until paid.
Continue filing required returns and paying current taxes. A penalty-relief request does not by itself create a payment plan or stop every collection action. If the remaining balance cannot be paid in full, review the separate IRS payment-plan process.
Special cases
- Estimated tax penalties: the IRS directs taxpayers to the specific individual or corporate underpayment rules rather than the general reasonable-cause route.
- Accuracy-related and information-return penalties: different legal standards and documentation can apply.
- Statutory exceptions or erroneous written IRS advice: use the specific IRS instructions for that basis.
- Already-paid penalties: a refund claim can have a filing deadline. Review Form 843 instructions or obtain professional advice promptly.
Official sources
- IRS — administrative penalty relief and AEP transition
- IRS — penalty relief for reasonable cause
- IRS — current Form 843 page
- IRS — where to file Form 843
- IRS — penalty appeal eligibility