Best of TaxLetter: New IRS Guidelines For Abating Penalties

Under new procedures, IRS will consider the following circumstances reasonable cause for abating penalties for noncompliance with reporting or payment requirements:

Death, your own or a close relative. Serious illness, your own or a close relative. Unavoidable absence of the taxpayer (jail, kidnap, travel, etc.). Destruction, by casualty or civil disturbance, of the taxpayer's residence, place of business or businesss records. Inability to obtain necessary records for reasons beyond the taxpayer's control. The return was postmarked on time, even if the envelope had insufficient postage. Failure by IRS to provide accurate information or necessary forms and instructions following timely request. Incorrect advice of a tax specialist where the taxpayer exercises reasonable care and prudence. The return was filed timely, but with the wrong IRS office. (No. 40)

IRS has also announced that henceforth, the death of your accountant (who was a C.P.A.), will be accepted as a reasonable excuse for failure to file timely. (February 1980)


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Created: March 21, 1996; Last updated: January 26, 2004
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