How the IRS provides disaster-related penalty relief

When a major disaster occurs the IRS often issues a disaster relief notice or announcement that lists covered counties and describes automatic relief measures (filing and payment extensions, penalty relief, and special procedures). See the IRS disaster relief page for current announcements and deadlines (IRS).

Relief usually takes two forms:

  • Automatic relief: the IRS announces extensions or waived penalties for taxpayers in specific counties or ZIP codes. Follow the IRS notice to meet revised deadlines.
  • Individual abatement requests: if you’re not covered by automatic relief or still face penalties, you can ask for abatement by showing reasonable cause tied to the disaster.

Evidence the IRS commonly accepts

Collect documents that show the disaster’s impact on your ability to comply. The stronger and more contemporaneous the evidence, the better. Useful items include:

  • FEMA disaster declaration or state/local emergency declaration (FEMA)
  • Repair estimates, contractor invoices, photos of damage, insurance claim numbers
  • Evacuation orders, shelter records, utility outage reports, police or emergency responder reports
  • Financial records showing interruption: bank statements, payroll records, cancelled checks, invoices
  • Correspondence with insurers, lenders, or vendors showing delays or losses
  • Proof you lost records (fire or flood statements), and any efforts to reconstruct them

In my practice helping small businesses after hurricanes, including FEMA declarations plus dated repair invoices and bank records typically produces a favorable outcome when paired with a clear reasonable‑cause letter.

How to request abatement — step by step

  1. Confirm whether the IRS issued automatic disaster relief for your area at https://www.irs.gov/individuals/disaster-relief. If automatic relief applies, follow the notice instructions.
  2. If you still have penalties, gather evidence (see checklist above) and prepare a reasonable‑cause statement describing what happened and why you couldn’t comply.
  3. Submit the request:
  • If you received an IRS notice, respond to the address on the notice and include the notice number, copies of supporting documents, and your reasonable‑cause letter.
  • If no notice, you can send a written request or use Form 843 (“Claim for Refund and Request for Abatement”) for certain penalties — follow IRS instructions or call the phone number on IRS notices to confirm the correct procedure.
  • For employment tax penalties, follow the IRS guidance for payroll deposit penalties and include employer documentation.
  1. Keep copies and document when and how you sent materials. Expect processing times from several weeks to a few months; complex cases take longer.

What to include in a reasonable‑cause statement

  • Dates when the disaster affected you and how it prevented compliance
  • Specific tasks you could not perform (e.g., couldn’t access files, office destroyed, bank closed)
  • Actions you took to comply (attempts to file/pay, communications with third parties)
  • A clear request (waive penalty X assessed on date Y)

See our guide to writing evidence-led requests for more templates and examples: how to ask the IRS for a penalty abatement: evidence that works.

Professional tips and common mistakes

  • Document everything at the time of the disaster — contemporaneous records are the most persuasive.
  • Don’t assume relief is automatic for every taxpayer in the state — check the IRS announcement carefully or you may miss a deadline. For an overview of how filing and payment extensions affect you, see: disaster relief filing extensions.
  • Avoid vague letters. State facts, include dates, attach evidence, and sign the request.
  • If you have multiple penalties (failure-to-file, failure-to-pay, payroll penalties), address each separately and include supporting documents specific to each issue.

If your request is denied

You can appeal an abatement denial through IRS appeals channels or request a Collection Due Process hearing if collection action continues. Keep appeals deadlines in mind and preserve all communications.

Timeline and expectations

Processing varies. Simple requests supported by clear disaster declarations and documentation can be decided in weeks; complex cases or those requiring appeals may take months. The IRS backlog and staffing can lengthen timelines.

Sources and further reading

Disclaimer: This article is educational and not personalized tax advice. For specific tax decisions, consult a qualified tax professional or attorney.