Form 843: How to Request Penalty Abatement in Writing

When a phone call will not do it, the IRS wants paper. For most penalty relief, that paper is Form 843, Claim for Refund and Request for Abatement.

The form looks simple: a name block, some checkboxes, a few lines of numbers. Most of it is. But the form is also a formal claim, and when the penalty has already been paid, it can be the claim that preserves your right to get the money back. Filling it out carelessly is a good way to lose a good case.

When Form 843 is the right form

The Form 843 instructions say to use it to claim a refund or request abatement of certain taxes, penalties, additions to tax, interest and fees. Among the listed reasons are an abatement or refund of a penalty or addition to tax due to reasonable cause or other reason allowed under the law, an abatement or refund under section 6404(f) of a penalty caused by erroneous written IRS advice, and an abatement or refund of interest due to IRS error or delay under section 6404(e)(1).

The instructions also say what not to use it for. Not to request abatement of income, estate or gift tax. Not to amend an income or employment tax return. If you need to change the tax itself, the amended return is the vehicle, and the penalty relief request can accompany it.

And one practical note from the instructions: if you received an IRS notice about a change, a penalty or interest, follow the instructions on the notice. You may not have to file Form 843 at all. Many penalties can be handled by responding to the notice or by a phone request.

Who signs, and who can file

You can file Form 843 yourself, or your authorized representative can file it for you. The instructions say that if a representative files it, the original or a copy of Form 2848 must be attached, signed by you and authorizing the representative to act for purposes of the request.

If the request relates to a joint return, both spouses must sign. Corporate requests are signed by an authorized officer, with title. Estate and trust requests are signed by the fiduciary. A legal representative for a decedent attaches proof of authority and Form 1310, as the instructions describe.

Separate forms and where to send them

Generally, you file a separate Form 843 for each tax period and each type of tax. Three years of penalties means three forms, though they can travel in the same envelope with a single cover letter.

For penalties, the instructions say to mail the form to the service center where you would be required to file a current year return for the tax involved, unless you are responding to an IRS notice. If you are responding to a notice, send it to the return address on the notice. When in doubt, follow the notice. It tells you where the people working your account are.

The lines that matter

Line 1 is the tax period. Line 2 is the dollar amount you want refunded or abated. Line 3 lists the dates of any payments, if you are asking for a refund. Lines 4 and 5 identify the type of tax and return.

Line 6 asks for the Internal Revenue Code section of the penalty. The instructions say you can generally find it on the notice of assessment. IRC 6751(a) requires penalty notices to include the name of the penalty, the Code section and a computation, so it should be there. Getting it right tells the reader exactly what you are contesting: 6651(a)(1) for late filing, 6651(a)(2) for late payment, 6656 for a deposit penalty, 6662 for the accuracy-related penalty, and so on.

Line 7 asks for the reason for the request. The instructions say, for example, to check box b for a request based on erroneous written IRS advice.

Line 8 is the explanation. The instructions tell you to explain in detail your reasons for filing, show your computation and attach supporting evidence. This is your penalty abatement letter. Most people write two sentences here. Do not. Attach a full statement and write see attached statement on the line.

What goes in the statement

The statement should follow the IRS's own evaluation criteria. For reasonable cause, IRM 20.1.1.3.2 lists the questions: what happened and when, what prevented compliance, how it caused the failure, how you handled your other affairs, and what you did once things changed. Answer each one, with dates.

Identify every penalty you want removed. The manual says that if a taxpayer specifically requests relief from only one penalty, only that one penalty should be considered. Ask for all of them.

Attach documents, not just descriptions. For illness, records with start and end dates. For records problems, the letters you wrote to get them. For erroneous IRS advice under section 6404(f), the regulation and the Form 843 instructions require copies of your written request, the IRS's written advice, and any report of adjustments. The full structure is in writing a penalty abatement letter.

Sign it. Treas. Reg. 301.6651-1(c)(1) calls for a reasonable cause statement containing a declaration that it is made under penalties of perjury, and the form itself is signed under that declaration.

Deadlines

If the penalty has not been paid, you are asking for abatement. There is no refund claim deadline running, though waiting lets interest and, in some cases, the penalty itself keep growing.

If the penalty has been paid, Form 843 is a claim for refund, and the refund statute applies. The instructions summarize it: generally, you must file within 3 years from the date you filed the original return or 2 years from the date you paid, whichever is later. That rule comes from IRC 6511(a), and IRC 6511(b) limits how much you can recover based on when you paid. Details are in recovering penalties you already paid.

For erroneous written advice under section 6404(f), the instructions and the regulation say the request must be made within the period allowed for collecting the penalty or, if paid, within the refund claim period.

Common Form 843 errors

A few errors come up again and again. Checking more than one reason box; the instructions say to check only one at the top of the form. Combining several tax periods on one form when separate forms are required. Leaving line 6 blank so the reader has to guess which penalty you mean. And sending the form without the Form 2848 when a representative signs it. Each one slows the request down or sends it back.

After you file

Keep a complete copy and proof of mailing. Certified mail with a return receipt is the old reliable. Calendar a follow-up. If you hear nothing in a reasonable time, call the number on your notice and ask whether the request has been received and assigned.

If it is granted, check your account transcript to confirm the abatement posted and that related interest was adjusted. The IRS says it automatically reduces or removes interest tied to a penalty that is reduced or removed.

If it is denied, IRM 20.1.1.3.5.3 requires a written denial that explains the decision and your appeal rights. That letter starts the clock for appealing a penalty abatement denial.

Form 843 is a modest piece of paper. Treat line 8 like the brief it is, and it will do real work. For a sense of how the firm approaches these filings, see penalty abatement at getirshelp.com.