Recomputation of Interest and Penalties - General
Internal Revenue Manual Part 3. Submission Processing · 2026-10-03 edition · updated 2026-10-04 · United States
See IRM 20.2 , Interest, for information on computing interest. Even though this IRM has instructions for manually adjusting penalty and interest, input manual restrictions only after determining that the computer cannot correctly assess or abate the penalty, interest, or both.
If the taxpayer requests abatement of a penalty due to reasonable cause, then refer to IRM 3.14.2.6.1.1.7, Taxpayer Correspondence.
The computer may assess and abate penalties on the Master File when:
An exam adjustment posts
A tax adjustment posts
An approved Extension of Time To File posts after the tax and penalties were computer assessed
An adjustment to a refundable credit posts
A payment posts, or is transferred to or from the account
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