The IRS charges penalties for being late, whether it’s missing a filing deadline, sending a partial payment, or making a mistake on your return. But not every penalty sticks. If you have a valid reason, you can ask the IRS to remove it. That’s where a penalty waiver request letter comes in.
This letter doesn’t need to be long or emotional. It just needs to be right. The IRS looks for structure, facts, and clarity; nothing more, nothing less.
This blog post walks you through exactly how to write one that gets noticed. If you're looking for a real example, we’ve also included a first-time penalty abatement letter sample to help you see how everything comes together.
Understanding the Penalty Waiver Request Letter
A penalty waiver request letter is a written explanation you send to the IRS to ask for the removal of a penalty. This usually applies when you are charged for filing your tax return late or for making a late payment.
The letter gives you the opportunity to explain why the delay occurred and request that the penalty be removed. It does not cancel the tax you owe, only the additional penalty amount.
The IRS reviews your explanation and decides whether to accept it. The language in the letter does not need to be complex. What matters is that your explanation is honest, reasonable, and clearly stated.
When to Use a Penalty Waiver Request Letter?
You should consider sending a penalty waiver request letter if you believe the penalty was unfair or if you had a valid reason for missing the deadline.
Some common examples include:
- A serious health issue that prevented timely action.
- Loss or damage of important records.
- A prompt correction was made shortly after the error.
- A clean compliance history with no prior penalties.
The IRS cannot know your situation unless you explain it. This letter helps provide that context and shows that your delay was not due to neglect.
In some cases, especially if this is your first mistake, the IRS may allow first-time penalty abatement, which offers one-time relief for eligible taxpayers.
Common IRS Penalties Eligible for Waiver
Not all IRS penalties can be removed, but some of the most common ones are eligible for relief. If you’ve received a notice from the IRS, it’s important to check which type of penalty was charged. Below are the main categories that may qualify for a waiver:
- Late filing: Charged when you fail to file your tax return.
- Late payment: Applied when you file your return but don’t pay the tax owed on time.
- Failure to deposit: Often seen with payroll taxes when a business doesn’t deposit taxes correctly or on time.
- Accuracy-related: Happens when there are mistakes in your return that lead to underreporting income or overstating deductions.
- Dishonored checks: Issued if your payment to the IRS bounces due to insufficient funds.
- Information return penalties: Related to forms like 1099s or W-2s that were filed late or not filed at all.
- Underpayment of estimated taxes: Applies to both individuals and corporations that don’t pay enough tax during the year.
The IRS may also offer relief for other penalties in special situations. For example, you may qualify if:
- You received incorrect written advice directly from the IRS.
- You were affected by a federally declared disaster.
- You mailed your return on time, but it was delayed due to circumstances beyond your control.
- You can show reasonable cause for the late or incorrect filing of certain information returns.
These are less common, but they are still valid grounds for relief. It’s important to read your IRS notice carefully and understand what kind of penalty was applied.
Key Elements of an Effective Penalty Waiver Request Letter
A strong penalty waiver request letter should give the IRS all the details it needs to understand your case. Each part has a role, and leaving one out can weaken your request. Here are the elements that matter most:
- Your identification details: Begin with your full name, address, and taxpayer identification number (SSN or EIN). Also include the tax year in question and the notice number from the IRS letter, if there is one.
- A clear request: State right away that you are asking for a penalty to be removed. Mention the type of penalty, such as late filing, late payment, or failure to deposit, so there is no confusion.
- An explanation of circumstances: Briefly describe what led to the penalty. Keep it direct and factual, focusing only on the event or issue that caused the delay.
- Supporting evidence: Point to the documents that back up your explanation, and include copies with your letter. This could be medical records, disaster relief papers, or payment records.
- Your compliance history: Let the IRS know if you usually file and pay on time. A clean record helps show that this penalty was a one-time issue.
- Corrective actions taken: Explain what you did to resolve the problem once you realized it. For example, filing the return, making the payment, or setting up a plan.
- A professional closing: End by repeating your request for the penalty to be waived. Add your phone number or email in case they need more information, and sign and date the letter.
Step-by-Step Guide to Writing a Penalty Waiver Request Letter
An effective penalty waiver request letter has to be very honest and very clear and should also be supported by strong evidence. The IRS processes a lot of these requests every day, so the correct structure will make it more likely that your request will be successful. Follow these steps to create a letter that is effective:
Step 1: Review your IRS notice and gather information
Start with the IRS notice you got. Take note of the notice number, the kind of penalty, the amount, and the deadline for the response. Get your personal information ready, which consists of your name, address, and taxpayer identification number. If the penalty was related to some event like illness, natural disaster, or financial hardship, then get proof documents for that. Medical records, insurance papers, or payment receipts can all be used as evidence for your claim.
Step 2: Start with a clear introduction
Your identification details should be written at the top of the letter. The IRS notice should be cited by its number and date. Then, the purpose of the letter should be mentioned directly.
For example: “Through this letter, I am seeking the cancellation of the late payment penalty charged against me in the case of tax year 2025, and I do so with utmost respect.”
This immediately informs the IRS of your request.
Step 3: Explain your situation with supporting evidence
In a few words, tell the story behind the event, and give the reason why you could not submit your taxes on time. Present the case with facts, and do not let emotions get in the way. You can tell the IRS what was happening and how it affected your tax filing or payment operation. Attach the documents as evidence and mention them in your letter. This would not only make your request more credible but also more organized.
Step 4: Make the formal request for relief
After your explanation, the next step is to clearly request the removal of the penalty. Politeness is good, but directness is better. Your tax penalty waiver letter should specify the reasons that render your case eligible for IRS relief. Whether you are talking about your first error or a one-off event over which you had no control, make it clear in your communication so that the IRS can understand the basis for the penalty being waived.
Step 5: Close the letter professionally
Thank the IRS for its time and consideration at the end. If necessary, say you can provide more information and provide your contact information. Use a respectful closing like “Sincerely,” and then write your name and sign it.
Format for a Penalty Waiver Request Letter
A penalty waiver request letter should follow a clear and professional structure. Below is a sample format for a tax penalty waiver request letter you can use as a guide. Keep your details accurate and attach supporting documents where needed.
| From: [Your Full Name] [Your Address] [City, State, ZIP Code]Date: [Month Day, Year] To, Subject: Request to Waive Penalty Dear Sir or Madam, I am writing this letter in response to the IRS notice dated [insert date] regarding the penalty imposed for [type of penalty, e.g., late filing/late payment] for tax year [year]. [Paragraph explaining the reason: Briefly describe the situation or event that prevented timely filing or payment. State the facts clearly and honestly.] [Paragraph highlighting compliance: Mention your history of filing and paying taxes on time, and explain that this issue was a one-time occurrence.]I respectfully request that the penalty be waived, considering the circumstances and my past record. Thank you for your time and consideration. Sincerely, |
Penalty Waiver Request Letter Example
Once you understand the format, the next step is to see how it looks in practice. Below are two sample penalty waiver request letters written using the same structure.
One is based on reasonable cause, while the other is a first-time penalty abatement letter sample, ideal for taxpayers with a clean filing history. These examples will give you a clear idea of how to present your own situation in a way the IRS can review and understand with ease.
Example Letter 1 (Reasonable Cause)From: Date: March 5, 2025 To, Subject: Request to Waive Late Filing Penalty Dear Sir or Madam, I am writing this tax penalty waiver request letter in response to the IRS notice dated February 15, 2025, regarding the late filing penalty for tax year 2023. The delay occurred because I was hospitalized for emergency surgery in early April and was unable to complete my return by the April 15 deadline. Once I recovered, I filed the return and paid the tax owed in full. I have enclosed hospital records and discharge papers to confirm my situation. In past years, I have always filed and paid on time. Considering these circumstances, I respectfully request that the penalty be waived. Thank you for your time and consideration. Sincerely, |
Example Letter 2 (First-Time Abatement)From: Date: March 12, 2025 To, Subject: Request for First-Time Penalty Abatement Dear Sir or Madam, I am writing to request abatement of the late payment penalty assessed for tax year 2023. This is the first time I have received a penalty of this kind. For many years, I have filed and paid my taxes on time without issue. I believe I qualify for relief under the IRS First-Time Penalty Abatement program. I kindly request that this penalty be removed based on my clean compliance history. I remain committed to filing and paying on time in all future years. Thank you for considering my request. Sincerely, |
Get Trusted Support from a Former IRS Agent and a Team That Knows What Works!
Writing a penalty waiver request letter is one thing; getting the IRS to take it seriously is another. The IRS carefully reviews every detail, and any missing or unclear information can lead to a denial without explanation.
Mr. Michael Sullivan, a former IRS agent, understands the review process and what the IRS seeks. He leads a skilled team of IRS tax specialists, including CPAs, attorneys, and Certified Tax Resolution Specialists, dedicated to providing your case with the attention it deserves and delivering top-notch tax resolution services.
FAQs
In most cases, the IRS requires you to send a penalty waiver request letter by mail. However, if you're responding to a notice that was delivered through your IRS online account, you may be able to upload your response digitally. Fax is also accepted in some situations, especially if a Revenue Officer is involved. Always check the instructions on your specific IRS notice to confirm the correct submission method.
It typically takes anywhere from 30 to 60 days for the IRS to respond, but delays are common. If your case is more complex or involves multiple years, it may take longer. You won’t usually get updates during the review, so it's normal not to hear anything until a final decision is made.
Yes, you can. If the IRS denies your request, it usually includes an explanation. You can respond with more details and supporting documents or request a formal appeal through the IRS Office of Appeals. Acting quickly matters, so don’t ignore the response. Follow the instructions and timelines given.
Yes. In most cases, the IRS gives you 60 days from the date on the penalty notice to submit your request. But this can vary depending on the type of penalty and notice. If you're unsure, it’s always better to send your letter sooner rather than later. Waiting too long could limit your options.
No, it doesn’t. Interest continues to build on unpaid taxes even while your penalty waiver request is being reviewed. That’s why it’s important to resolve things as quickly as possible. The longer it sits, the more you may owe.
Yes, but you don’t always have to. If the penalties are related, like multiple years of late filing, you can address them all in one letter. Just be clear about each year and penalty you’re requesting relief for. If the penalties are unrelated or from different IRS units, separate letters might be better.
A Sample letter requesting a waiver of tax penalty gives you a clear idea of how to structure your own request. It usually follows a simple format: start with a short introduction, explain what happened, add any supporting facts or documents, and then make your request for relief. You can find examples in this blog, including a first-time penalty abatement letter sample and a reasonable cause template to help you get started the right way.
Businesses can absolutely request penalty waivers. The process is similar to that for individuals; the business needs to explain the reason for the late filing or payment and support it with documentation. Whether you’re a sole proprietor or a larger company, the IRS still expects a strong case for relief.
"Reasonable cause" means you had a valid reason beyond your control, like serious illness, natural disaster, or incorrect advice from a tax professional. First-time abatement is a one-time break if you’ve had a clean record for the past three years. Both can help remove penalties, but they apply in different situations.
