Question

Which of the following is not true regarding reasonable cause for penalty abatement?

Reasonable cuase is an inability to meet tax filing a payment resonsibilities fue to circumstances beyond the taxpayer's control.

Reasonable reliance on erroneous written advice from the IRS is considered reasonable cause.

Reasonable cause is a defense to the estimated tax penalty.

Death, serious illness, or unavoldable absence of the taxpayer may constitute reasonable cause.

Answer 1

Answer

Part c. is not true regarding reasonable cause for penalty abatement.

Reason

Part A  Reasonable cause is any legitimate excuse for not paying or filing on time.There is rule of thumb, you have to look whether the situation was out of your control or not.

Part B  Also examples of reasonable cause includes Death, serious illness, or unavoldable absence of the taxpayer, held hostage in another country, destruction of your records due to fires, floods, or other casualties, etc.

Part D  The IRS may provide penalty relief based on a taxpayer’s reliance on erroneous oral advice from the IRS. IRS is required by IRC 6404(f) and Treas. Reg. 301.6404–3 to abate any portion of any penalty attributable to erroneous written advice furnished by an employee acting in his or her official capacity. Administratively, the IRS has extended this relief to include erroneous oral advice when appropriate.

Therefore Part C. 'Reasonable cause is a defense to the estimated tax penalty' is not true  regarding reasonable cause for penalty abatement.