For interest: you must demonstrate that you experienced an unreasonable delay that was the IRS's fault. Except for a few cases where the IRS actually lost our papers, I've not seen this happen much. (I guess the IRS thinks most delays are reasonable.). . For penalties: it is basically a reasonable cause standard. If you were unable to pay your taxes in full at the time they were due, even though you were using reasonable care, then the IRS will give relief on penalties, despite what most people think. If something bad was happening (you were seriously ill, your records were damaged in a flood or fire, etc.) when the taxes were due, you should have a pretty good shot. If it was the first time you were required to pay a tax and file a new type of return, it may be a slam-dunk. Even just financial hardship can be a good enough reason, though it's definitely not the strongest one around.. . Lots of clients want to get their penalties and interest reduced BEFORE they make a deal with the IRS. That's not going to happen. You need to make sure you're paying your current taxes and filing your current returns when they come due (never mind past stuff for right now) before you can get any favors. You should also either enter a repayment agreement before requesting P/I relief or discuss the possibility with your IRS contact at the same time you're making a deal with them. (Sometimes, the IRS will offer P/I relief as an incentive to make a repayment agreement.). . Requests can usually be made verbally, if you are dealing with a Revenue Officer (local IRS person assigned to hassle you into repaying). Otherwise, you'll probably be expected to submit an IRS Form 843 (available at www.irs.gov). Letters work, too, but they have to be so specific that it's tough for most people to do correctly. If you are claiming a reasonable cause to justify a penalty abatement, be prepared to provide documentation to prove your story.