Reasonable Cause is based on all the facts and circumstances
The RCA will be utilized to determine if penalty relief will be granted for any penalty abatement request based on reasonable cause, whether requested verbally or in writing. In order to achieve a successful abatement, the taxpayer must answer the questions who, what, when and how and supply appropriate supporting documentation to prove their assertions.
Types of situations
The IRS will consider any sound reason for failing to file a tax return, make a deposit, or pay tax when due. Reasons, if established, include:
- Fire, casualty, natural disaster or other disturbances
- Inability to obtain records
- Death, serious illness,
incapacitation or unavoidable absence of the taxpayer or a member of the taxpayer’s immediate family Other reason which establishes that you used all ordinary business care and prudence to meet your Federal tax obligations but were nevertheless unable to do so.
Documents You May Need
Most reasonable cause explanations require that you provide documentation with specific start and end dates to support your claim. Examples:
- Letter from a physician to establish illness or incapacitation
- Documentation of natural disasters
- Other events that prevented compliance
- Hospital records
- Court records