Form 843: when a written penalty abatement request is needed, and when a phone call will do

What Form 843 is for

The IRS says to use Form 843 to claim a refund or request an abatement of certain taxes, penalties, additions to tax, interest and fees. For someone with a back tax balance, the uses that matter are these:

• Removing a penalty, or getting back a penalty already paid, because of reasonable cause or another reason the law allows
• Removing a penalty caused by erroneous written advice from the IRS
• Removing interest caused by an unreasonable IRS error or delay
• Requesting abatement or refund of a trust fund recovery penalty

What it cannot be used for

The instructions are specific about the limits. A request on the wrong form is not processed, and the time spent waiting is lost.

• It cannot reduce income tax itself. To change the tax on a Form 1040, file an amended return on Form 1040-X.
• It cannot be used to claim a refund of installment agreement fees, offer in compromise fees or lien fees.
• Employers cannot use it to correct FICA or withholding. Those are corrected on the X version of the employment return, such as Form 941-X.
• It does not remove interest on the tax simply because you could not pay. Interest follows the tax unless the IRS itself caused the delay.

When you do not need the form at all

The IRS notes that if you received a notice about a penalty, you should follow the instructions on the notice, and that you may not have to file Form 843. The Automatic Exemption from Penalty page explains who qualifies and what replaced First Time Abate.

How to fill it in

1. 1.Use one form per tax period and per type of tax. The instructions say a separate Form 843 is generally required for each.
2. 2.Line 1: enter the tax period the penalty belongs to.
3. 3.Line 2: enter the dollar amount you want abated or refunded. Take it from your account transcript, not from memory.
4. 4.Line 3: if you already paid the penalty, give the payment dates.
5. 5.Lines 4 and 5: check the type of tax and the return the penalty relates to, such as 1040.
6. 6.Line 6: enter the Internal Revenue Code section of the penalty. It is printed on the notice. Failure to file is section 6651(a)(1) and failure to pay is section 6651(a)(2).
7. 7.Line 7: check the reason. Reasonable cause is its own box.
8. 8.Line 8: explain what happened, with dates, and attach the evidence.

If the request relates to a joint return, both spouses sign. A paid preparer who completes the form must sign it too and give you a copy.

Writing the reasonable cause statement

Line 8 is where a request succeeds or fails. The IRS is deciding whether you used ordinary care and still could not comply, so the statement has to connect an event to the missed date.

State what happened, when it started and ended, how it stopped you from filing or paying, and what you did once it was over. Attach proof: hospital records, a death certificate, an insurance claim, a disaster declaration, letters showing you tried to get records. Not having the money is generally not enough for a failure to pay unless you show what caused it. Our page on penalty abatement covers what tends to succeed and what tends to fail.

Where to send it, and time limits

If you are responding to an IRS notice, the instructions say to mail Form 843 to the return address the notice came from. If your authorized representative files it, a copy of Form 2848 must be attached.

A claim for a refund of a penalty you already paid generally has to be filed within 3 years from the date you filed the original return or 2 years from the date you paid, whichever is later. When a penalty is removed, the IRS automatically removes the interest that was charged on that penalty. Tax and the interest on the tax stay. See how penalties and interest build up.

• Responding to a notice: mail it to the return address on that notice
• Filed by an authorized representative: attach a copy of Form 2848
• Refund of a penalty already paid: within 3 years of filing the return or 2 years of paying, whichever is later
• Keep a copy of the form, the statement and every attachment

Where we come in

We read your account transcripts for each year to see which penalties were assessed, in what amounts, and whether a clean three-year history exists. We help assemble the records that support a reasonable cause statement, and we prepare any unfiled returns, since relief is not granted while returns are missing. We give you a scope and a price in writing before anything starts. For a single year with a clean record, a call to the number on your notice may be all it takes.