How do I get IOS penalties waived? This is actually a pretty big topic. I know the IRS sends out a little two-page taxpayer Bill of Rights, and they kind of lead you to believe that's the only rights I have. However, that is far from the truth. I've got books and volumes of information on tax code, IRS letters, and Tax Court rulings that indicate otherwise. There are hundreds of different ways you can get penalties abated. The most common would be for reasonable cause in good faith. So, if you got penalized for underreporting or not reporting a given income or business activity, and you showed reasonable cause in good faith for not reporting timely, then this is due to be abated or removed. You can have penalties removed up to two years from the time they're paid. So, even if you've already paid it, if your two years hasn't lapsed, hey, we can go back and, in a lot of cases, recover these penalties with the interest after the fact.