Introduction
Form 843: Your Key to Tax Relief and Penalty Abatement
Form 843 is a multipurpose tax document provided by the IRS that allows taxpayers to make claims for refunds of certain assessed taxes or request the abatement of interest and penalties that were erroneously applied. Whether you need a refund of overpaid Social Security or Medicare taxes, or to contest penalties due to IRS errors, Form 843 can come to your rescue.
Key Takeaways
- Form 843 is essential for claiming refunds on specific taxes or requesting the abatement of interest and penalties that were mistakenly charged by the IRS.
- Timeliness is of the essence. The form must be filed within two years from the date the taxes were paid or three years from when the return was submitted, whichever comes later.
- A distinct form must be filed for each type of tax or fee, as well as for each tax year.
Practical Uses of Form 843
Form 843 serves several purposes beyond merely adjusting income tax returns:
- Estate or gift taxes that need recalibration.
- Interest or penalties imposed due to IRS errors, delays, or incorrect advice.
- Refunds for Social Security or Medicare taxes that were withheld inaccurately.
However, it cannot be used for things like adjusting previously filed income or employment tax returns, or seeking refunds on Federal Insurance Contributions Act (FICA) taxes or Railroad Retirement Tax Act taxes.
Eligibility Criteria for Filing Form 843
You can file Form 843 if:
- Your employer withholds more income, Social Security, or Medicare tax than owed and won’t make adjustments.
- There are inaccuracies or delays caused by IRS leading to improper interest or penalties.
Each type of tax or fee and each tax year requires a separate Form 843 to be filed. Do note, however, that claiming excessive refund amounts can invite a penalty up to 20% of said excess.
Steps to File Form 843
Filing Form 843 demands the following information:
- Basic personal details: name, address, Social Security number, tax period, tax type, return type.
- Justification for your claim for a refund or abatement including a detailed description of circumstances around the error.
- Penalty abatement requests must include the IRC section number of the penalty (located on the IRS notice you received).
- Choose a reason for your request: IRS errors, erroneous written advice, or reasonable cause.
- Elaborate in section 7 and support your argument with evidence and calculations. Additional pages may be attached if space is insufficient.
You can find Form 843 on the IRS website, and it’s crucial to file it within the mandated timeframe—either two years from tax payment or three years from return filing.
Special Considerations
If your claim is denied, or if there’s no response after six months, you have the right to petition either the U.S. District Court or the U.S. Court of Federal Claims. If applicable, filing a protective claim before the statute of limitations expire can ensure your right to pursue a refund is preserved.
Conclusion
Form 843 provides a valuable recourse for taxpayers needing to claim refunds for improperly assessed taxes or seeking abatement for undue penalties and interest. Understanding the form’s application, filing correctly, and knowing your rights if a claim is denied can provide financial control and moving towards rectified assessments optimistically.
Related Terms: Estate Tax, Gift Tax, Interest Penalties, Medicare Tax, Social Security Tax.
References
- Internal Revenue Services. “Form 843”.
- Internal Revenue Service. “Publication 556 (09/2013), Examination of Returns, Appeal Rights, and Claims for Refund”.
- Treasury Inspector General for Tax Administration. “Additional Documentation Is Needed to Support Office of Appeals, Penalty Abatement Decisions”.
