By Glen L. Graves II, CPA, CTRS – Federally Authorized Tax Practitioner | Decatur, Georgia

Many taxpayers incorrectly assume IRS accuracy-related penalties are automatic and unavoidable. In reality, relief is available when the taxpayer can demonstrate reasonable cause and acted in good faith. The path to relief is often Form 843 + supporting documentation, not appeals court battles.

What is the IRS Accuracy-Related Penalty?

The IRS assesses an accuracy-related penalty—most commonly 20%—when tax is understated due to:

• negligence
• disregard of rules or regs
• substantial understatement of income tax
• substantial valuation misstatement
• misstatement involving pension liabilities
• estate/gift valuation misstatement

The penalty amount = 20% of the portion of underpaid tax related to the inaccuracy.

When Can the IRS Remove Accuracy-Related Penalties?

Contrary to popular belief, penalty relief is not limited to first-time abatement.

Under IRC §6664(c), penalties may be waived when:

1. The taxpayer acted with reasonable cause AND

2. Acted in good faith

Examples of reasonable cause include (not exhaustive):

• serious illness or medical hardship
• reliance on a tax professional
• reliance on third-party statements (brokerage 1099s, issuers, custodians)
• lack of access to records
• natural disaster or family crisis
• events beyond taxpayer control

The IRS wants a story showing why the taxpayer made the error and how they were acting reasonably—not excuses or emotional appeals.

How to Request Abatement

Most taxpayers should request relief through Form 843, Claim for Refund and Request for Abatement, unless responding through an exam/appeals process.

Steps: Form 843 Penalty Abatement Process

1. Complete Form 843
2. Attach:
   • penalty explanation statement
   • timeline of events
   • supporting evidence
3. Attach Form 2848 if authorized representative
4. Submit by mail to correct IRS service center
5. Monitor transcripts for adjustments (requires CAF authorization)

Best Practices for a Successful Request

To strengthen your case:

✔ Show timeline consistency

Explain dates of:

• triggering events
• filing attempts
• communications
• discovery of error

✔ Demonstrate good-faith compliance history

Even 2–3 years on-time filing/payment helps.

✔ Provide supporting documentation

Examples:

• physician statement or medical visit records
• emails to/from preparer
• correspondence delays
• records access problems

✔ Explain corrective actions taken

The IRS wants assurance the issue won’t recur.

Need help removing IRS penalties?
I assist taxpayers nationwide in preparing penalty abatement requests, transcript reviews, Form 843 filings, and IRS resolution strategies.

At EAS Income Tax Services, we provide comprehensive Atlanta tax services—including tax resolution, tax preparation, and accounting. Whether you’re a local small business or an individual dealing with IRS problems nationwide, we’re here to help.

If you know of anyone in need of assistance with an IRS problem, please have them call us at (404) 719-0330, or send us an email at GLG@eas.tax.