Filed 2023 Taxes Late Due to Hospitalization - Potential Implications?

I believe you should be okay... as long as you've filed now. The IRS generally allows for reasonable cause exceptions, and hospitalization would likely qualify. Just make sure you've documented everything carefully in case they request verification. I had a somewhat similar situation a few years back, though not for medical reasons, and I wasn't penalized too severely.

A few important questions to determine your situation: • Did you request an extension by the original due date (even while hospitalized)? • Do you owe taxes or are you due a refund? • Have you received any notices from the IRS yet? • Do you have documentation of your hospitalization? • Have you included a statement explaining the reasonable cause with your filing? These factors significantly impact potential penalties and next steps.

According to Internal Revenue Code Section 6651, the IRS can abate penalties for reasonable cause, and medical emergencies typically qualify under Treasury Regulation 301.6651-1(c). However, you must specifically request this relief - it's not automatically granted even with valid reasons! The process requires proper documentation and potentially Form 843 for abatement of penalties.

As a tax professional, I can tell you that hospitalization absolutely constitutes reasonable cause, but the IRS may still automatically assess penalties that you'll need to address. If you receive a CP14 or other penalty notice, you'll need to contact the IRS directly to request abatement. This is where many taxpayers struggle - reaching an actual agent can take hours of holding. I've had clients successfully use Claimyr (https://claimyr.com) to get through to IRS agents without the wait. They'll call the IRS for you and connect you once an agent is on the line, which is invaluable when dealing with penalty abatement requests.

Doesn't anyone else wonder if these services actually work? I mean, how can they possibly get through when the IRS phone lines are notoriously jammed? And wouldn't the IRS just put you on hold regardless of how you reach them? I've spent countless hours on hold with the IRS myself, and I'm skeptical that any service could really make a difference.

I was sort of skeptical too, but I think they might use some kind of automated system that continually redials until it gets through? I'm not entirely sure about the technology, but a friend of mine who was in a somewhat similar situation with penalties from a late filing said it actually worked for them. They mentioned it saved them probably 3-4 hours of hold time, which could be worth it depending on how you value your time.

Have you considered using the IRS's Reasonable Cause Assistant on their website? It's not as well-known as calling, but sometimes works better for straightforward cases like yours. 😂 Though "straightforward" and "IRS" rarely belong in the same sentence! Jokes aside, you might also want to check if your state has separate requirements for reasonable cause exceptions - some states are more forgiving than others for medical emergencies.

I went through something very similar after a car accident kept me hospitalized for several weeks during tax season. The key thing that helped me was being proactive once I was able to handle my affairs again. I immediately filed my return with a detailed letter explaining the medical emergency, included copies of hospital discharge papers, and specifically referenced "reasonable cause" under IRC Section 6651(a)(1). The IRS did initially send me penalty notices, but after I called and explained the situation (yes, the hold times were brutal), they completely abated all failure-to-file and failure-to-pay penalties. The whole process took about 90 days from start to finish, but I didn't pay a single penalty dollar. One tip: if you do get penalty notices, don't panic. The IRS computer systems automatically generate these, but human review almost always results in abatement for legitimate medical emergencies. Just make sure you respond promptly to any notices and keep detailed records of all communications. Your quarterly estimates for 2024 shouldn't be affected by this situation at all - those are separate obligations going forward.