Home |IRS Tax Return | Is there a possibility to request the removal of fines and penalties associated with a CP2000 notice due to not including my husband's W-2 on last year's filing, especially given the challenging circumstances involving moving, health issues, and pregnancy, and if so, what steps should I take to pursue this option and potentially reduce the amount owed to the IRS?

Is there a possibility to request the removal of fines and penalties associated with a CP2000 notice due to not including my husband's W-2 on last year's filing, especially given the challenging circumstances involving moving, health issues, and pregnancy, and if so, what steps should I take to pursue this option and potentially reduce the amount owed to the IRS?

Robert James, 20+ years of experience in IRS matters
Answered on September 16,2023

This post from a tax pro suggests requesting a waiver of the accuracy-related penalties in your initial response to the CP2000:

IRS CP2000 Underreporter Inquiries

I think his explanation in another post was that it can be easier to request the waiver before the penalties are assessed than afterwards.

You need to try to meet the reasonable cause criteria in order to get accuracy-related penalties waived. Here's a couple of links with more information:

Penalty Relief for Reasonable Cause

Unsigned or Oral Requests for Penalty Relief

You'll need to scroll down through a lot of this second link to find the different criteria for reasonable cause - it's written for IRS employees.

I recommend you try that first - at this point the penalties haven't actually been assessed. If they don't waive the accuracy-related penalties, then once you get a bill with the penalties you can fill out Form 843 requesting abatement for reasonable cause.

FYI reasonable cause is difficult to get approved, and sometimes people have to appeal the initial denial a couple times before they succeed.

You might qualify for First time penalty abatement for any Failure to Pay penalties - this is easier to get as long as you don't have any issues for the three years before the tax year in question. You can call and request this by phone; again, you would have to wait until that penalty is formally assessed, and it's best to wait until you pay the original tax due also.

Penalty Relief due to First Time Abate or Other Administrative Waiver

There's no waiver for the interest portion, but if you can get the penalties reduced or waived that can lower the amount of interest you may have to pay.

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