A legally recognized excuse for failing to meet a tax obligation that can remove a penalty when the taxpayer used ordinary business care and prudence but still could not comply.

"Reasonable cause" is narrower than a general hardship claim and broader than a single listed excuse. For federal taxes, the standard appears in Treasury Regulation 26 C.F.R. § 301.6651-1(c)(1) for late-filing and late-payment penalties and in 26 U.S.C. § 6664(c)(1) for many accuracy-related penalties. The taxpayer must show specific facts: what duty was missed, what prevented compliance, what steps were taken to try to comply, and why those steps were reasonable under the circumstances. Serious illness, hospitalization, records destroyed by fire or flood, or reliance on a competent tax professional on a technical tax question may qualify. Mere forgetfulness, lack of funds by itself, or reliance on an agent to mail a return usually does not.

Practically, the defense can eliminate penalties, but not the underlying tax or statutory interest. That can sharply reduce total tax debt and may change whether the IRS files a tax lien, levies wages, or accepts penalty abatement during an audit or collection dispute.

For injury cases, the issue often appears when a person misses deadlines because of surgery, cognitive impairment, or extended rehab. If supported with records and dates, a reasonable cause defense can preserve more of a settlement or wage-loss recovery by cutting avoidable tax penalties.