Death, serious illness, or inevitable absence of the taxpayer or their immediate family members. The existence of the elements that constitute reasonable cause, deliberate negligence or good faith is based on all facts and circumstances. Reasonable cause is established when the taxpayer exercised usual commercial care and prudence. Ordinary commercial care and prudence are defined as the degree of care that a reasonably prudent person would exercise, but who, however, cannot comply with the law.
In essence, a taxpayer can have reasonable cause when evidence of their conduct justifies the non-imposition or reduction of the fine (“Reasonable Cause”). Cases are tried individually; judgments are based on the evidence, facts and circumstances presented. Ordinary commercial care and prudence are defined as the degree of care that a reasonably prudent person would exercise. Reasonable cause is when you had a legitimate reason to pay the tax or file your tax return late.
It generally applies to struggling taxpayers who are affected by conditions beyond their control. To obtain compensation based on reasonable cause, taxpayers must demonstrate that they have used the usual commercial care and prudence to file or pay their taxes. You cannot get this type of relief if there was negligence or recklessness.