tax returns
I would like to know if mental illness, with documented proof, is a reasonable cause for late filing and being exempt from paying penalties.
2 Answers from Attorneys
Re: tax returns
Yes. The first step is the documented proof, which you have. However, that is not enough. You must show how the mental illness caused you not to file or pay. I know that sounds obvious, but the IRS looks very closely at that before making a decision. If they deny your request, you can often win by appealing. If you have any questions, please call me at 18002191118. Steve Klitzner
Re: tax returns
A showing of "reasonable cause" could avoid the addition to tax (penalties) imposed on a taxpayer for either the failure to timely file a return or the failure to pay the tax due on time. Please note that these are two separate penalties imposed upon a taxpayer. Depending upon the totality of the facts and circumstances, documented mental illness could be used to abate (forgive) one or both of these penalties. I say one or both because "reasonable cause" is a term of art in the federal tax system and each penalty has a different standard as to what constitutes "reasonable cause" for that particular penalty.
Let me know if I can assist you further.