Penalty Abatement for Businesses

An abatement is a cancellation of a penalty or the interest on the penalty (see Minnesota Statute 270C.34). We do not abate tax and rarely abate the interest on tax.

You may request an abatement if either of the following apply:

• You have reasonable cause for filing or paying late, such as circumstances beyond your control or a first-time occurrence.
• You received incorrect advice in writing from a Minnesota Department of Revenue employee.

Submit your request after we notify you of a penalty.

Note: If a natural disaster affected your ability to file or pay on time, you may qualify for tax relief. For more information, see Disaster Relief.

You have reasonable cause when the late filing or payment is due to circumstances beyond your control – including unforeseen disasters or hardships, such as severe weather, fire, flood, explosion, theft, or arson that result in losing your home, your business, or your records. 

For more information, see Revenue Notice 97-01.

You must send a written request within 60 days of the date on the first notice of penalty we mail you. You do not need to pay tax or interest before requesting an abatement if your request is timely. Your request must include:

• A statement that you are requesting an abatement
• Your name and contact information
• Your business’ name
• Your Federal Employer Identification Number (FEIN) or Minnesota Tax ID Number
• The tax types and periods included in your request
• The reason you believe we should abate the penalty
• Supporting documentation

It depends on your situation and the type of tax and penalty. Use the table below to determine where to send your request:

Note: If you do not submit an abatement request within the 60 days, you may be able to file a claim for a refund. For more information, see Claim for Refund.

We will consider your request and notify you of our decision.

• If we approve your request, we will notify you by mail and either reduce your amount due or refund your amount overpaid.
• If we deny your request, we will send you a letter explaining why and provide appeal instructions.

If you do not receive our decision within 45 days of your request, contact us to check the status. If we do not respond to your request within 60 days, you may appeal to the Minnesota Tax Court.

For more information, see Revenue Notice 97-01.