According to the IRS, "a taxpayer can prove reasonable cause by demonstrating that he or she exercised ordinary business care and prudence in their affairs but nevertheless were unable to comply with the requirements of the law."
The IRS has accepted the following situations as reasonable cause as shown below:
- death, serious illness, or unavoidable absence;
- fire, casualty, natural disaster, or other disturbance;
- an inability to obtain necessary records;
- lack of funds;
- ignorance of the law;
- tax law changes and IRS form revisions;
- taxpayer's mistake;
- reliance on the advice of a competent tax advisor.