RS manual provisions state the following regarding the estimate tax penalty:
Estimated Tax Penalty and Reasonable Cause
- The penalty for underpayment of estimated tax cannot be removed or waived for reasonable cause alone. The IRS is tough on this penalty.
- The penalty for underpayment of estimated tax generally is not waived as a result of disaster. However, in the case of a Federally declared disaster area, “the Secretary may specify a period of up to 1 year that may be disregarded” in determining whether or not estimated tax payments were paid on time. In these cases the IRS will issue a memo with specific instructions regarding the payment of estimated tax in the affected area. The sire instructions and areas of relief are found on their web site. irs.gov.
- Programming generally takes all special disaster area rules into consideration when computing the penalty for underpayment of estimated tax. Even when the taxpayers books and records are kept within the disaster area, while the taxpayers official address of record is not, manual adjustment of the penalty should not be required for taxpayers affected by a widespread disaster. See IRM 20.1.3.1.3.2.1.
The estimate tax penalty is almost not abateable . It usually takes an act of nature to make this happen.
