Quick overview

Appealing an IRS penalty means asking the IRS to reconsider a charge it assessed against you. Successful appeals depend on presenting credible evidence, meeting any deadlines on the notice you received, and choosing the correct submission route. In my 15 years in financial services I’ve guided clients through this process dozens of times; well-organized documentation and a clear, concise explanation are the two most important factors.

(Authoritative sources: IRS penalty pages and appeals guidance—see links in the Evidence & Sources section.)

Why penalties are appealed (short background)

The IRS imposes penalties to encourage timely and accurate reporting and payment of taxes. Taxpayers can appeal when a penalty was assessed in error or where there was reasonable cause for noncompliance. Common grounds for relief include:

  • Reasonable cause (serious illness, death in the family, natural disaster, inability to obtain records, erroneous professional advice).
  • Administrative waivers such as First-Time Penalty Abatement.
  • Computational or clerical errors by the IRS.

Appeals are typically handled administratively first. If relief is denied, taxpayers may escalate to the IRS Office of Appeals and, in many cases, ultimately petition U.S. Tax Court.

Step-by-step procedure to appeal an IRS penalty

  1. Read the IRS notice carefully
  • Each notice or letter identifies the penalty type, the tax period, the amount, and the deadline to respond. The response deadline and route (reply to the notice, file Form 843, or contact the IRS Appeals Office) may differ by notice type—always follow the instructions on your specific notice.
  1. Identify the correct remedy and form
  • Form 843, Claim for Refund and Request for Abatement, is commonly used to request abatement for certain penalties and to claim refunds of penalties paid. See the IRS Form 843 page for form details and instructions (IRS, About Form 843).
  • Some penalties or notices direct you to reply to the specific notice, file a formal protest to the IRS Office of Appeals, or use online IRS tools. If your notice says to contact the IRS Appeals Office or file a protest, follow that instruction.
  1. Build a concise written statement (the core of your appeal)
  • Explain what happened in plain language and why the penalty is incorrect or should be abated. Call this your reasonable-cause statement when applicable.
  • Include key facts: dates, names, what you tried to do, the specific relief requested, and how the attached documents prove your claim.
  • Keep it factual and tightly organized (bullet points or short paragraphs make it easier for an examiner to follow).
  1. Collect and attach supporting evidence
  • Bank statements showing payments or transfers.
  • Medical records, hospital or physician letters showing incapacitation.
  • Insurance or disaster declarations (FEMA or state emergency declarations) that line up with the tax period.
  • Correspondence with tax professionals showing reliance on advice (if claiming erroneous advice).
  • Proof of mail delivery or certified return receipts if you mailed a return or payment on time.
  1. Include administrative-screening options
  • If eligible for First-Time Penalty Abatement (FTA), request it. FTA is an administrative relief option when a taxpayer has a clean compliance history for the prior three years and meets filing/payment conditions (IRS guidance on FTA).
  1. Submit the appeal correctly and keep proof of filing
  • Mail your package to the address on the IRS notice (certified mail is recommended) or submit electronically if the notice allows or if using the IRS Online Account tools. Keep copies of everything.
  1. Track the case and be prepared to follow up
  • Expect an acknowledgement, a request for more information, or a decision. Response times vary; the IRS may take several months depending on case complexity and workload.
  1. If denied, escalate
  • If abatement is denied, you can request a Collection Due Process hearing or appeal the decision with the IRS Office of Appeals. If administrative appeals are exhausted, consider petitioning U.S. Tax Court to contest the deficiency. A tax attorney or enrolled agent can advise here.

Evidence that strengthens an appeal

Strong evidence is contemporaneous and specific. The IRS looks for documentation that supports your factual claims and shows you acted with ordinary business care and prudence. Key evidence types by scenario:

  • Medical/emergency: hospital records, physician letters, proof of hospitalization dates.
  • Natural disaster: FEMA disaster declarations, insurance claims, repair estimates.
  • Bank/payment issues: bank statements, canceled checks, wire confirmations, proof of attempted online payment.
  • Reliance on professional advice: written advice from a CPA or tax attorney, invoices, engagement letters, and communications showing the advice you received.
  • Identity theft or third-party error: police reports, FTC identity-theft reports, IRS Identity Theft Affidavit (Form 14039) documentation.

Templates and examples: write a short timeline of events and attach documents in the order referenced in your written statement. Number pages and cite them in the narrative to make review easier.

Common appeal routes and when to use them

  • Respond to the IRS notice: Most penalty notices include instructions on how to contest the penalty. Use the route specified.
  • Form 843: Use when the penalty can be abated or refunded via this form (see form instructions). This is a common method but not a universal solution for every penalty.
  • Online request/IRS account: For some penalty relief requests, the IRS’s Online Account or certain online tools allow submissions or status checks.
  • IRS Office of Appeals: If the IRS denies your administrative request, file a formal appeal to the Office of Appeals (follow the protest requirements on the denial letter).
  • U.S. Tax Court: If you receive a statutory notice of deficiency or exhaust administrative appeals, you may have the right to petition Tax Court. Tax court deadlines and rules differ—seek professional help if you reach this stage.

Practical examples (realistic, anonymized)

  • Medical emergency: A taxpayer hospitalized before the filing deadline missed timely filing. The appeal package included hospital discharge papers, physician notes, and a timeline showing inability to file. The IRS granted reasonable-cause relief.

  • First-time abatement: A taxpayer with a clean history missed a payment due to an accounting error. We requested First-Time Penalty Abatement and provided bank records and an explanatory statement. The IRS removed the penalty under FTA.

  • Erroneous IRS assessment: A taxpayer received a penalty rooted in the IRS’s misapplied payment. A certified mail receipt, bank records, and the notice response led to quick correction.

Note: these are typical scenarios—not guarantees of outcomes.

Mistakes to avoid

  • Waiting to act until the deadline has passed—many notices give limited time to respond.
  • Sending disorganized evidence—label and number exhibits and reference them in your statement.
  • Failing to follow the specific instructions on the IRS notice about where and how to submit an appeal.
  • Assuming Form 843 is always the right form—use the method noted on your notice or the IRS guidance when uncertain.

If your appeal is denied: next steps

  1. Request a review by the IRS Office of Appeals following the denial letter instructions.
  2. Consider Collection Due Process rights if collection action is involved.
  3. Evaluate taking the dispute to U.S. Tax Court—this is often time-sensitive and best handled with a tax practitioner.

Professional representation (CPA, enrolled agent, or tax attorney) is helpful when complex facts, large penalty amounts, or litigation risk are present.

Resources and authoritative sources

FinHelp internal guides (further reading):

Short checklist before you send an appeal

  • Read your IRS notice for the correct mailing address or appeal route.
  • Prepare a one-page summary + a numbered evidence packet.
  • Include Form 843 if appropriate and the required signatures.
  • Keep certified-mail or courier receipts and copies of everything.
  • Note your case number and the IRS contact if provided.

Final notes and disclaimer

This article is educational and based on professional experience and current IRS guidance as of 2025. It is not individualized tax advice. Complex cases or litigation questions should be reviewed with a qualified tax professional (CPA, enrolled agent, or tax attorney). Following the steps above will help you prepare a clear, evidence-backed appeal and improve the odds of a favorable outcome.