Hi Mary Anne-
In my experience, penalty abatement is usually a 1-time forgiveness for someone who doesn't have a record of making mistakes, not paying etc. You are most likely dealing with an agent who's being hardline. I'd start by calling and asking what the basis of the denial was, you can always go up the food chain to their supervisor, if still no, they can request assistance from their local state representative or congress person and as a last resort, they can go to TPAS (tax payor assistance). Surely they are eligible simply because they filed in good faith, and how were they to know the software wasn't updated?
I got the below from the IRS website
Remove or Reduce a Penalty
We may be able to remove or reduce the penalty if you acted in good faith and can show reasonable cause.
If you have reasonable cause, and received Notice 972CG, respond within 45 days (60 days if you're a foreign filer) before we assess the penalty. You may have reasonable cause if you:
- Acted responsibly before and after the failure occurred and
- Have significant reasons or the failure resulted from circumstances beyond your control
For details on reasonable cause for missing and incorrect names or Taxpayer Identification Numbers, see Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs on Information ReturnsPDF.
By law, we cannot remove or reduce interest unless the penalty is removed or reduced.
For more information, see penalty relief.
Dispute a Penalty
If you disagree with the amount you owe, you may dispute the penalty.
Call us at the toll-free number at the top right corner of your notice or letter or write us a letter stating why we should reconsider the penalty. Sign and send your letter along with any supporting documents to the address on your notice.
Have this information when you call or send your letter:
- The notice or letter we sent you
- The penalty you want us to reconsider (for example, a Form 1099-NEC late filing penalty)
- For each penalty, an explanation of why you think we should remove it
If a notice or letter we sent you has instructions or deadlines for disputing the penalty, pay careful attention. You must follow the instructions to dispute the penalty.
Here is the link with further information.
https://www.irs.gov/payments/information-return-penalties
Hope this helps.
Victoria Wertz
Managing Partner
North Star Title Services, LLC
3780 Northpoint Dr
Marietta GA 30062
Direct:770-402-2385
Fax:770-872-7975
victoria@northstartitleservices.com
NOT LICENSED TO PRACTICE LAW