Illness, Disaster or Lost Records: When an Event Beyond Your Control Is Reasonable Cause

By Forrest Baumhover, CFP®, EA · Last verified October 30, 2026

A death, a fire or missing records can remove an IRS penalty, but the event alone does not. The IRS wants to see how it stopped you, when it ended, and what you did next.

The Event Opens the Door. It Does Not Win.

Policy Statement 3-2 says sound causes, "if established, will be accepted as reasonable cause" (IRM 1.2.1.4.2). It names death, serious illness, unavoidable absence and fire, and IRS.gov adds natural disasters and inability to get records. Each one still has to pass the reasonable cause test: you used ordinary care, and the event left you unable to comply.

The most important fact: timing can defeat a strong reason. The IRM tells employees to compare the event with the due date and with the day you complied (IRM 20.1.1.3.5). If the event ended well before you acted, it may no longer explain the delay.

What people mistake a serious event for

People treat a serious event as proof on its own. The IRM says otherwise about disasters: one of these circumstances "by itself does not necessarily provide penalty relief" (IRM 20.1.1.3.2.2.2). A hard year is the start of the request, not the whole of it.

Death, Serious Illness or Unavoidable Absence

For an individual, this covers your own death, serious illness or unavoidable absence. It also covers a death or serious illness in your immediate family, which the IRM defines as spouse, sibling, parents, grandparents and children (IRM 20.1.1.3.2.2.1).

For a corporation, estate or trust, the event must involve the person with sole authority to sign the return, make the deposit or pay the tax, or a member of that person's immediate family. If someone else could act, the IRS asks why that person did not. If only one person could act, the IRS asks whether that setup showed ordinary care.

Expect questions about your relationship to the person, the date of death, the dates and severity of the illness, the dates and reasons for an absence, and how the event stopped you. The IRM also asks whether your other business obligations suffered, and whether you dealt with your taxes promptly afterward.

Fire, Casualty, Natural Disaster or Other Disturbance

Check first whether the IRS already gave you more time. In a major disaster, relief usually comes as an extension for an area, and the IRS generally applies it to accounts automatically (IRM 20.1.1.3.3.5). The reasonable cause rule is for taxpayers outside that "affected taxpayer" group (IRM 20.1.1.3.2.2.2).

The IRM names four factors: timing, the effect on your business, the steps you took to try to comply, and whether you complied when it became possible. A single event can also fit another rule. A fire that destroys records points to the records rule below, and a hospital stay after an accident points to the illness rule.

Unable to Obtain Records

The IRM says missing records may be reasonable cause in some cases and not in others (IRM 20.1.1.3.2.2.3). This reason has the hardest question in the group: why did you not estimate? The IRM asks it directly.

Be ready to explain why you needed the records, why they were unavailable, and when you learned you did not have them. Show what steps you took, what other sources you tried, and whether you contacted the IRS for instructions. Then show that you complied promptly once the information arrived.

Keep copies of the letters you wrote and the replies you got, because the IRM names them as support. Records in someone else's hands may not excuse a long delay after you get them back, unless other facts justify it. The IRM's example involves a bankruptcy trustee or an accountant (IRM 20.1.1.3.5).

What to Gather Before You Ask

IRS.gov lists hospital or court records, or a doctor's letter, that confirm an illness "with start and end dates." It also lists disaster records, copies of relevant letters and responses, and receipts or forms. Build a short timeline: due date, event start, event end, the day you filed or paid.

Common Questions