Reasonable Cause Penalty Abatement – What Oklahoma Taxpayers Need to Know
If you’ve been hit with IRS penalties for filing late, paying late, or missing a deposit — but have a legitimate excuse — you may still qualify for relief.
Even if you don’t qualify for First-Time Abatement, the IRS allows penalty removal under what’s called Reasonable Cause Penalty Abatement.
At Summit Tax Relief, we help Oklahoma clients build strong cases to remove IRS penalties based on real-life hardship.
Here’s how it works.
What Is Reasonable Cause Abatement?
Reasonable Cause is the IRS’s term for “you had a valid reason for what happened.”
If you can prove that your failure to file or pay was due to circumstances outside your control, and that you acted as soon as reasonably possible, the IRS may abate:
- Failure to File (FTF) penalties
- Failure to Pay (FTP) penalties
- Failure to Deposit (FTD) penalties
- Sometimes even accuracy-related penalties
Common Reasons That Qualify
The IRS considers these to be potentially valid reasons for penalty abatement:
| Reason | Examples |
|---|---|
| Illness or Death | Serious illness or death in the family that impaired your ability to file/pay |
| Natural Disasters | Tornadoes, floods, wildfires (common in Oklahoma) |
| Theft or Casualty Loss | Records destroyed due to fire, theft, or weather |
| Divorce or Domestic Disruption | Unanticipated financial or legal upheaval |
| Bad Tax Advice | CPA or preparer gave you incorrect instructions |
| Economic Hardship | Events like job loss, hospitalization, business collapse |
| IRS Delay or Miscommunication | You tried to resolve it but the IRS didn’t respond in time |
Reasons That Usually Don’t Work
- “I forgot”
- “I don’t agree with the penalty”
- “I’ve had money issues for years”
- “I didn’t open my IRS mail”
The IRS requires you to show that you exercised ordinary business care and prudence — but still couldn’t comply.
How We Build a Strong Reasonable Cause Request
At Summit Tax Relief, we handle these abatement requests with precision. Our typical package includes:
- A detailed written statement explaining the situation and timeline
- Medical records, legal documents, or news articles (as applicable)
- IRS account transcripts and notices for context
- A formal request for abatement citing Internal Revenue Manual (IRM) sections
- Follow-up and negotiation with the IRS directly under Power of Attorney
Oklahoma Case Example
Client: Edmond-based small business owner
- Missed 941 payroll deposits during hospitalization and tornado cleanup
- IRS assessed over $8,000 in penalties
- We submitted Reasonable Cause abatement request with hospital records, FEMA disaster notice, and timeline
- IRS approved full abatement within 4 weeks
What’s the Standard for Approval?
The IRS uses the "ordinary business care and prudence" test:
- Did you try to comply?
- Was your failure due to factors outside your control?
- Did you act to fix the issue as soon as you could?
If the answer is yes across the board — and you provide documentation — you may qualify.
Why Work With Summit Tax Relief?
- CPA-led and based in Oklahoma — we understand local hardship documentation
- We cite the exact sections of the Internal Revenue Manual (IRM) the IRS must follow
- We know when to file Form 843, when to write a narrative, and when to escalate
- Flat-fee pricing — no hourly surprises
- We use penalty relief to support larger resolution strategies like OIC or Installment Agreements
Related Blog Posts (Internal Links)
- First-Time Penalty Abatement – How Oklahoma Taxpayers Can Remove IRS Penalties
- IRS Form 4549 – How to Respond to Audit Findings
- IRS CP504 Notice in Oklahoma – What It Means and What to Do
Get Help Now
Think your IRS penalty is unfair? We’ll help you make the case — and fight to get it removed.
Call Summit Tax Relief at (833) 477-4911
Schedule Your Free Strategy Call
FAQ
Q: Can I request penalty abatement for multiple years?
A: Yes — but you must build a clear, supported case for each year individually.
Q: Can I still qualify if I owe back taxes?
A: Yes. You don’t have to pay the balance first — we can file the request while resolution is ongoing.
Q: What if the IRS denies my request?
A: We can appeal internally or escalate through the Taxpayer Advocate Service if appropriate.
Q: Is this different from First-Time Abatement?
A: Yes. FTA is automatic if you meet compliance history. Reasonable Cause requires a narrative and evidence.
📣 About the Author
Marc Boulanger, CPA is the founder of Summit Tax Relief LLC, a boutique tax resolution firm based in Oklahoma City, OK and trusted by high-income individuals and business owners across Oklahoma.
He is the author of Oklahoma Taxpayers' Guide: Taking A Stand Against the IRS: A Step-by-Step Plan for Dealing With Tax Collectors and Unfiled Returns Without Going Broke, available now on Amazon. The book offers a step-by-step plan for resolving IRS tax debt without losing your business, your home, or your peace of mind.
With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.
Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.
Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.
📍 Learn more at www.summittaxrelief.com or call (833) 477-4911.
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