Reasonable cause penalty relief (opens the official IRS page in a new tab) turns on what actually stopped you filing, and sympathy for the lapse plays little part. Tested against the ordinary business care and prudence standard, four common British explanations rarely succeed alone: my accountant never said, I did not know, I live abroad, and the bank never told me. Illness and lost records can succeed, if dates and documents support them.
This post is for US citizens and green card holders in the UK with a late return, FBAR or information form who want an honest view of their explanation before putting it in writing. It extends our guide to catching up on US filings from the UK by testing six excuses one at a time. Replying to a bill is covered in our post on IRS penalty notices, and gifts in our post on late Form 3520.
What does ordinary business care and prudence mean
It means you took the steps a sensible person would take to meet the obligation, and something still prevented compliance. The IRS penalty handbook (opens the official IRS page in a new tab) judges each case on its own facts. Its reviewers then look at foreseeability, your filing history and the gap before you eventually complied.
Those three points are more useful than any list of acceptable reasons, because each can be answered from a calendar. The handbook tells staff to check at least three preceding tax years, to measure the time between the cited event and later compliance, and to ask whether the event could have been anticipated. It also expects provision to be made for obligations when foreseeable events occur. An explanation that covers one year and leaves the earlier years unexplained has a visible hole in it.
The test also shifts with the penalty. The IRS page asks about ordinary care for failure to file or pay, and about effort, complexity and your own knowledge for accuracy penalties. For information returns it wants responsible conduct before and after the failure, plus mitigating factors or events beyond your control. The international penalties manual (opens the official IRS page in a new tab) is sterner about foreign matters. The FBAR manual (opens the official IRS page in a new tab) uses the same care and prudence wording and also expects accurate late reports. These manuals instruct IRS staff; they are guidance rather than statute.
How do the six usual excuses from Britain score
Four are weak alone, and the two with real prospects both rest on a dated event. The list below is our own reading of IRS material against each excuse, set out as excuse, rating, what can carry it and what cannot. It sorts the arguments; it does not predict any result.
A weak rating is not a ban on raising the point. The handbook allows lack of knowledge to count alongside other facts, and a good statement often joins several modest points into one account. The list is most useful for spotting a statement whose central claim has no document behind it.
- My UK accountant never mentioned it. Weak. Can carry: a dated question about US filing and a wrong technical answer. Cannot: silence under a UK-only engagement
- I did not know. Weak alone. Can carry: limited US background, no earlier penalty, prompt correction. Cannot: a bare statement of surprise
- I live abroad. Weak. Can carry: a specific dated event that blocked filing. Cannot: a UK address or the distance itself
- The bank never told me. Weak. Can carry: a letter fixing when you first learned. Cannot: the bank's silence, or a FATCA letter you ignored
- I was ill. Stronger. Can carry: hospital or doctor's letters with dates, and prompt filing afterwards. Cannot: a diagnosis unconnected to the filing dates
- My records were lost. Possible. Can carry: proof of the loss, requests for copies, and why no estimate was workable. Cannot: the same claim every year
Does relying on a UK accountant count as reasonable cause
For the act of filing, generally not. The handbook says the responsibility to file or pay cannot be delegated, and that relying on a tax advisor generally does not excuse it. Advice can matter on a technical question of substance, but only where advice on that question was actually given.
Three situations are often run together. An accountant hired for UK Self Assessment (opens the official GOV.UK page in a new tab) who never raised America gave no advice, and silence is hard to present as advice. A preparer who agreed to file and failed is a reliance point, and the IRS page says to confirm what your preparer files and obtain proof. A preparer who answered a real question wrongly comes closest, though the handbook confines relief from other penalties to very limited instances involving technical or complicated issues.
Evidence decides which situation you are in. Look for the engagement letter, the email in which you mentioned your US passport or asked about US filing, and the reply. For accuracy penalties, the IRS page asks whether the adviser had all the information and was competent and experienced with your situation, so a UK-only practitioner's view on a Form 8938 question may be questioned. Our IRS representation service works from those papers once a penalty is in dispute.
Is not knowing, living abroad or bank silence ever enough
On their own, rarely. The handbook says reasonable cause should never be presumed where ignorance of the law is claimed. The IRS page says you are responsible for knowing or getting advice on requirements. Other facts must therefore do the work, and each of these three excuses needs some.
The handbook names those facts: education, earlier penalties, complexity, a good faith effort to comply, and a requirement you could not reasonably be expected to know. Those favour an accidental American who left as a baby far more than someone who once filed a Form 1040. The international manual is harder still, saying it is not reasonable or prudent to have no knowledge of the treatment of international transactions.
Residence abroad is not listed in the reasonable cause sections we read. The IRS gives people abroad an automatic extension (opens the official IRS page in a new tab) to 15 June, which assumes they will file. Unavoidable absence does appear as a ground, but a settled move to Britain is hard to call unavoidable, though the handbook does not address that directly. We also found no IRS wording that treats a bank's silence as an excuse. A FATCA letter from your UK bank can date when you learned, which helps only if you acted soon afterwards.
When can illness or lost records support penalty relief
When the event explains the specific dates and you complied promptly once it ended. Serious illness, death and inability to get records are all named on the IRS page. They are starting points, because the handbook then tests how the event prevented compliance and what you did next.
For illness, the handbook weighs your relationship to the person affected, the dates, duration and severity, how the event prevented compliance, whether other business obligations suffered, and how promptly tax duties resumed. It also asks why anyone else authorised to act did not do so. The IRS suggests hospital or court records and a doctor's letter with dates. A letter that confirms a condition without dates does little, because the reviewer is comparing it with a deadline.
For records, the handbook asks why they were needed, why they were unavailable, what steps you took, whether other means were explored, whether you contacted the IRS and why you did not estimate. A closed UK account or a former employer is a fair starting point if you can show dated requests for copies. The international manual says testimony that records were unavailable year after year has no merit, so this ground tends to weaken with repetition.
How might this look for a teacher in Bristol
A US citizen teaching in Bristol files her 2021, 2022 and 2023 returns on time. She enters hospital on 12 May 2025, a month before her 2024 return is due on the 15 June date, and is discharged on 8 August. Signed off work until 1 December, she files on 29 December, 28 days after returning.
Run through the handbook's questions, her position looks reasonable. The event was not foreseeable, her history is clean, and the delay after recovery is short. Her evidence is a hospital letter giving both dates, a doctor's note covering the recovery and proof of posting. With three clean years she should ask about administrative relief (opens the official IRS page in a new tab) first, as that test may be easier than this one. The 15 October extended date had also passed before she filed, so an extension would not have made the return timely.
Change one fact at a time. If she sent her UK tax return in September 2025 while signed off, the reviewer may ask why that obligation could be met and this one could not. If she files in December 2026 instead, the gap of a year undercuts the illness. If her 2021 to 2023 returns were also missing, an illness starting in 2025 explains none of them, and a catch-up route for those years becomes the real question. None of this guarantees a result either way.
Can an explanation pass as non-wilful yet fail here
Yes. The two tests ask different questions. Non-wilful conduct on the Streamlined pages includes negligence, inadvertence and mistake, while the IRS says a mistake generally does not establish reasonable cause. I did not know may therefore fit one test and fall short of the other, depending on the facts.
That difference affects which route you choose. The page for taxpayers residing outside the United States (opens the official IRS page in a new tab) relies on a non-wilful certification and does not mention reasonable cause; on that Foreign route, eligible filers are not subject to failure to file, failure to pay, information return or FBAR penalties, unless an examination finds fraud or a wilful FBAR violation. The Domestic route carries a 5% offshore penalty. Neither is open once an examination has begun. Someone with unreported income and only a weak excuse should therefore look at our IRS streamlined filing service and our guide to catching up before drafting a statement.
The two accounts must also agree. Our post on the Form 14653 certification covers the written narrative, and a statement sent elsewhere should not contradict it. Before drafting anything, work through the checks below, then contact US UK Tax Returns with your dates if the answers are thin. Our individual tax returns work keeps the following year on time, which matters because the handbook looks at compliance history.
- Name the penalty and form, because the test differs by penalty
- Write the deadline beside the date of the event you are citing
- Check the three preceding years for the same failure
- Count the days between the event ending and your filing
- Attach a document to each factual claim, or remove the claim
- Compare the account with anything already signed for the IRS
General information, not advice. The right answer depends on your circumstances and the tax year concerned.
