DEFINITION of Form 843: Claim For Refund And Request For Abatement

Form 843 is a multipurpose U.S. federal tax form used to make a claim for refund of certain assessed taxes or to request abatement of erroneously applied interest or penalties.

BREAKING DOWN Form 843: Claim For Refund And Request For Abatement

On occasion, your employer withholds too much income, social security or Medicare tax from your paycheck and won’t adjust it for you. On occasion, due to IRS error or delay, you are wrongly assessed interest, penalties or additions to tax you don’t owe. On these occasions, you can request that the IRS fix it by filing a claim for refund or abatement on Form 843.

Form 843’s Most Common requests

Form 843 asks the IRS to refund:

  • tax other than income, estate, or gift tax
  • fees
  • penalties paid
  • taxes withheld in error and unadjusted by your employer
  • Section 6715 penalties for misuse of dyed fuel

Form 843 asks the IRS to abate:

  • interest, penalties or additions to tax caused by IRS error or delay, incorrect written advice from the IRS
  • penalties for reasonable cause
  • FUTA tax
  • certain excise taxes

Generally, a separate Form 843 must be filed for each type of tax or fee, and for each tax year.

Form 843 Limitations

Form 843 only applies to certain types of tax, interest, penalties, and fees. There are many circumstances where you need to file a form other than Form 843 to request a refund or abatement. For example, Form 843 can’t be used to:

  • amend a previously filed income or employment tax return
  • claim a refund of lien or offer-in-compromise fees
  • request abatement of gift or estate taxes
  • claim a refund or abatement of FICA tax, Railroad Retirement Tax, or income tax withholding

.Although Form 843 is the form to file to request abatement of interest or penalties related to income tax, it is not the form to file to request for abatement of income tax. The reason? Form 843 is not an amended tax return. Claims for income tax refunds are made for the current year by filing a federal income tax return and for previous years by filing an amended federal income tax return. Individuals file IRS Form 1040 or 1040X, corporations file IRS Form 1120 or 1120X, partnerships file form 1065 or 1065X, and estates and trusts file Form 1041 or 1041X.

Special Rules for Abatement of Interest, Penalties and Additions to Tax

The Internal Revenue Code mandates that a statutory amount of interest and penalties apply on unreported and unpaid taxes. The statutory nature of interest and penalties means that that special rules must be met before they can be refunded or abated. Interest can be refunded or abated only if the interest was assessed due to IRS errors or delay. Penalties or additions to tax can be refunded or abated only on a showing of reasonable cause or valid legal reason such as erroneous written advice from the IRS.

Form 843 Content

Form 843 requires basic information such as name, address, social security number, tax period, tax type and return type. It requires a statement of the facts and issues as to why you are entitled to a refund or abatement. Penalty abatement requests require you to write the Internal Revenue Code (IRC) section number of the penalty on line 4. You can find this section number on the IRS notice you received. Then, you must choose a reason for your request in Section 5 or write your own reason in Section 7. The choices are:

  • IRS errors or delays
  • Erroneous written information from the IRS
  • Reasonable Cause
  • Self-described reason (least likely to be approved)

Remember to support your reasons with evidence and computations.

Filing Form 843

If you received a notice, send Form 843 and supporting documents to the address on the notice. Otherwise, send the form to IRS service center closest to you. Generally, you must file Form 843 within 2 years from date you paid the taxes or three years from the date the return was filed, whichever is later.

Excessive Claims

If the IRS believes you claimed an excessive refund amount, it can hit you with a penalty equal to 20% of the amount determined to be excessive. You can request the IRS to waive the penalty if you can show you had a reasonable basis to claim that amount.

Claim Denial and Protective Claims

If the IRS denies your claim by sending a statutory notice of claim disallowance or if six months pass without any action, you can file a refund suit in the Federal Claims Court or a U.S. District Court. You can also file a protective claim before the expiration of the statute of limitations to preserve your right to make a claim for refund.  Protective claims and real claims have the same legal effect.