Form 843 Explained: Penalty Abatement Request Instructions & Details

The IRS is notorious for tacking on penalties wherever they can. Did you know that Form 843 can be used to request refunds of penalties, fees, and interest? You can only get rid of interest if it’s related to an IRS error or delay, but certain taxes and other fees may be completely erased in other situations.

What is IRS Form 843 Used for?

The most common use for Form 843 is to reduce tax interest and tax penalties incurred by taxpayers.

However, there are quite a few ways you can use Form 843 to get back money from the IRS:

  • Request a refund of taxes withheld by your employer in error, but only if your employer refuses to adjust the issue.
  • Request a refund of tax penalties and interest penalties that you have already paid.
  • Request abatement due to incorrect written advice from the IRS.
  • Request an abatement for reasonable cause (late on taxes due to health or medical reasons).
  • Request an abatement due to IRS related error or delay.
  • Request an abatement of tax other than income, estate, or gift tax.

What IRS Form 843 Cannot be Used For

Now that you know what Form 843 can be used for, let’s go over some circumstances where the form cannot be used. IRS Form 843 cannot be used to:

  • Amend an income or employment tax return that’s already been filed
  • Claim a refund of lien or for offer-in-compromise fees
  • Request abatement of gift or estate taxes
  • Claim a refund or abatement of FICA tax, Railroad Retirement tax, or
  • income tax withholding

It’s important to know that you will have to file a separate Form 843 for each type of fee or penalty to properly claim a refund. The IRS will take each request much more seriously if you don’t overload them with erroneous claims that aren’t likely to go through in the first place. It’s important to be detailed and honest in your claims, but be careful not to include anything that could possibly elicit an audit.

Form 843 Instructions

  • On line 1 of Form 843, enter the tax year that you are requesting a penalty abatement.
  • On line 2, indicate the amount to be refunded or reduced.
  • On line 3, check the box that best describes the type of tax or fee you wish to abate.
  • Line 4: When requesting a penalty abatement, it’s important to include the specific IRS section number related to the penalty. This number should be clearly stated on the notice that you received from the IRS about the penalty.
  • Line 5: In section 5 of Form 843, the IRS asks you to choose one of the following reasons for your request:
    • IRS errors or delays
    • Erroneous written information from the IRS
    • Reasonable cause: A death in the family, inability to obtain records, natural disasters, and other related instances. It’s important to note that the IRS will not consider a lack of funds a reasonable cause.
  • Line 6: Mark the box for the type of return that relates to the fee you’re requesting an abatement for.
  • Line 7: Write an explanation for your request.
  • Sign and date Form 843.
  • Include any necessary documents needed in the list below.

form 843

Documents You May Need While Filing IRS Form 843

Providing a reasonable cause is not required in your Form 843 but if you plan on including a reasonable cause, it’s important that you supply the following documents along with your form:

  • Hospital or court records or a letter from a physician to establish illness or incapacitation, with specific start to end dates.
  • Documentation of natural disaster or other events that prevented compliance.

Tips for Filing Form 843

  1. Stay humble—the majority of IRS employees are reasonable and non-judgmental people. Don’t get upset if things don’t go initially go as planned and certainly don’t take it out on the IRS.
  2. Be careful what information you provide—you don’t want to give the IRS anything that could potentially come back to haunt you in the form of an audit.
  3. Leave out any emotion in your letter—the IRS reads hundreds of these letters every day and they will only be looking for facts and a timeline. Keep your letter factual and include only what you need to state your case.
  4. IRS Form 843 must be filed within two years from the date you paid the penalty taxes or within three years from the date that you filed the return, whichever one is later.

Where to Mail Form 843

If you are responding to an IRS notice regarding a tax or fee related to certain taxes such as income, employment, gift, estate, excise, etc., mail your request to the address listed on the notice that you received. For penalties, or for any other reason other than an IRS notice, send mail to the IRS service center that you would normally file your tax returns. If you are unsure of where your IRS service center is you can find out where the closest one is by visiting the website.

How Long it Takes For Penalty Abatement

If you’re filing for IRS penalty abatement due to reasonable cause, the process typically takes between three to four months. If you’re filing an accuracy penalty abatement, the process can take years because the IRS will need to conduct an audit to verify your claim.

Help Filing Form 843

Are you considering filing an IRS Form 843? It’s always a good idea to seek the help of a qualified tax professional to assist you with all of your filing needs. We have an expert and diligent staff standing by to assist you with any and all tax-related questions and services. Call today and find out how we can help you find success in all your tax endeavors.