My adviser keeps talking about reasonable cause, but I think the penalty may be wrong on basic liability first. Does that distinction matter?
The way the case is being framed right now jumps straight to 'tell them why you had reasonable cause,' but I am not convinced that is the first question. If the form was actually filed, if the notice attaches to the wrong related party, or if the supposed failure is being described inaccurately, then basic liability feels like it should come before excuse. I do not want the file to concede the wrong issue by habit.
What I need is a cleaner mental model. If IRS penalty procedure distinguishes between whether the penalty applies at all and whether there is reasonable cause to remove it, I want our response to respect that sequence instead of arguing the softer point first by default.
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