When the IRS May Waive Interest

Unlike IRS penalties, where the IRS is permitted to remove or reduce a penalty based on reasonable cause, the law does not permit the IRS to remove or reduce interest based on reasonable cause. However, there is a situation when the IRS will remove interest.

The law requires the IRS to remove interest up to the date you were requested to repay an erroneous refund when:

  • You did not cause the erroneous refund in any way, and
  • The refund doesn't exceed $50,000.

File your personal and small business taxes (Schedule C)