Reasonable cause statement sample: telling the story of what happened

What a reasonable cause statement does

The IRS may remove or reduce certain penalties when you acted in good faith and with reasonable cause, and it decides case by case. The statement is where you supply the facts. For late filing or payment, the IRS looks at whether you used ordinary care and prudence. Its page lists examples such as fire or disaster, inability to obtain records, serious illness or death in the family, and system problems.

The same page says that reliance on a tax professional, lack of knowledge, mistakes, and lack of funds alone generally do not qualify. Knowing that helps you decide what to emphasize: not what you did not know, but what actually stood in the way and how you responded.

The shape of a good statement

Reviewers read many of these. The ones that are easiest to follow set out a timeline: what the requirement was, what happened and when, what you did during the problem, and what you did when it ended. Each statement of fact should point to a document.

The sample below uses a self-employed person whose records and computer were unavailable after a flood at the home office, and who then filed as soon as replacement records arrived. Your facts will differ, so use the structure, not the story.

Writing it in your own words

Use first person and past tense. Avoid adjectives about how hard it was; describe the event and its effect. Include the dates, the people you contacted, and the steps you took to comply while the problem lasted.

Do not stretch the facts to fit the list of examples. If the real reason was a mistake or being short of funds, say what happened plainly and add whatever circumstances surrounded it. The IRS also says reasonable cause does not apply to the estimated tax penalty.

Documents that help

Match the documents to the event you describe.

• Insurance claim or disaster assistance papers for a loss
• Letters from a hospital or physician, with sensitive details limited to what is needed
• Records of requests you made for lost or unavailable documents
• Screenshots or error messages if a system problem blocked you
• The filing or payment confirmation showing when you complied

Where it goes

The IRS says to call the number on your notice first, with the notice and facts ready, and to use Form 843 or a written request if the call cannot resolve it. This statement can be attached to Form 843 or sent as a letter. A denied failure-to-file or failure-to-pay request can be appealed using the instructions in the denial letter. IRS Audit Defense Pro is software that helps you organize your facts and draft a response letter you review and send yourself. It is not a law firm, CPA or enrolled agent, and it gives no legal or tax advice.

The sample statement

Replace each placeholder with your own facts and delete any section that does not apply.

Sample letter

This is a general template with placeholders. Replace everything in square brackets with your own details, and check it against the instructions on your notice.

[YOUR FULL NAME]
[YOUR STREET ADDRESS]
[CITY, STATE ZIP]

[DATE]

Internal Revenue Service
[ADDRESS ON YOUR NOTICE]

RE: Statement of reasonable cause
Notice [NOTICE NUMBER] dated [NOTICE DATE]
Penalty: [PENALTY TYPE AS SHOWN ON NOTICE]
Tax period: [TAX PERIOD]
Taxpayer identification number (last four digits): [LAST FOUR]

I request that the penalty described above be removed because my [FAILURE TO FILE OR PAY ON TIME] resulted from reasonable cause and not willful neglect. The facts are as follows.

Background. In the period before the due date I [DESCRIBE YOUR NORMAL PRACTICE, FOR EXAMPLE: GATHERED MY RECORDS AND PREPARED MY RETURN EACH YEAR IN ADVANCE].

What happened. On or about [DATE OF EVENT], [DESCRIBE THE EVENT IN PLAIN TERMS]. As a result, [DESCRIBE HOW IT PREVENTED YOU FROM FILING OR PAYING]. See enclosure 1.

What I did during that time. On [DATE] I [DESCRIBE STEP, FOR EXAMPLE: CONTACTED THE PAYER TO REQUEST REPLACEMENT RECORDS]. On [DATE] I [DESCRIBE NEXT STEP]. See enclosure 2.

When the problem ended. On or about [DATE], [DESCRIBE WHAT CHANGED, FOR EXAMPLE: I RECEIVED THE REPLACEMENT RECORDS]. I [FILED OR PAID] on [DATE]. See enclosure 3.

I took these steps because I intended to comply with my obligations, and the delay was caused by the circumstances described, not by indifference. I would appreciate a written reply. If you need more information, I can be reached at [DAYTIME PHONE].

I declare that the statements above are true to the best of my knowledge.

Sincerely,

[SIGNATURE]
[YOUR FULL NAME]
[DATE SIGNED]

Enclosures:
1. [DESCRIBE ITEM: DOCUMENT PROVING THE EVENT]
2. [DESCRIBE ITEM: RECORD OF YOUR REQUESTS OR EFFORTS]
3. [DESCRIBE ITEM: FILING OR PAYMENT CONFIRMATION]
4. Copy of notice [NOTICE NUMBER]

Frequently asked questions

Sources

• IRS: Penalty relief for reasonable cause
• IRS: Administrative penalty relief
• IRS: About Form 843

Related guides

• How to request penalty abatement from the IRSStart by checking whether your penalty qualifies for administrative relief based on a clean compliance history.
• Penalty abatement request letter sample (first-time relief)A penalty abatement letter names the penalty and tax period, describes your filing and payment history, asks the IRS to consider administrative relief and, if needed, reasonable cause, and lists what you enclose.
• Why you were charged an underpayment penalty, and what to checkThe underpayment of estimated tax penalty applies when you did not pay enough tax during the year through withholding or estimated payments, even if you paid the full balance at filing.
• You missed an IRS response date: what to do nextContact the IRS using the number or address on your notice as soon as you notice the date passed.
• An IRS notice about possible tax identity theftIf an IRS notice says a return was filed under your Social Security number or ITIN and you did not file it, follow the instructions printed on that notice.
• Behind on filing? Here is how past-due returns workThe IRS says to file every past-due return now, even if you cannot pay in full, rather than waiting to hear from it.