Form 13980 Guide – The Right IRS Forms for Penalty Relief

A few busy seasons ago, I watched a senior pull an all nighter trying to fix a client’s penalty issue. The file kept referencing “Form 13980.” The problem, nothing in the record matched that form’s real purpose. We lost time, the partner lost patience, and the client lost trust. If you have ever chased penalty relief or spouse relief with the wrong form number, I get it.

Here is the straight story. Form 13980 exists, just not for what many people think. It is a VITA Grant Performance Measures Report used by VITA grant recipients to report program results. It is not a penalty abatement form, it is not for innocent or injured spouse relief, and it does not reallocate withholding to stop interest. If you came here to fix penalties, file an extension, or claim spouse relief, you will use different forms. Below I map each real world goal to the right filing path, plus the documentation and workflow tips that keep your team out of review loops.

Key Takeaways

• Form 13980 is a VITA grant reporting form, not a penalty or spouse relief form.
• Federal penalty abatement usually runs through Form 843 or First Time Abate when eligible.
• Innocent spouse relief uses Form 8857. Injured spouse allocation uses Form 8379. They solve different problems.
• Extensions to file use Form 4868. An extension gives you time to file, not time to pay. Interest continues on unpaid amounts.
• California items often mixed into this topic include Schedule G 1 for lump sum distributions and FTB 588 or 589 for nonresident withholding adjustments. These are state tools, not federal penalty relief.
• Your outcomes improve when your evidence is tight, timelines are clear, and workpapers follow a disciplined structure.

What Form 13980 Actually Does

• Who uses it, VITA grant recipients and program administrators.
• What it reports, preparation volumes, site information, volunteer hours, and performance measures for a period of performance.
• Who should not use it, taxpayers or firms seeking penalty relief, spouse relief, withholding reallocations, or federal extensions.

If your search for “Form 13980” came from a penalty or spouse relief problem, keep going. I will point you to the correct forms, the evidence the IRS expects, and the swim lanes that keep your reviewers focused and fast.

If Your Goal Is Penalty Relief, Use The Right Federal Path

Reasonable Cause or IRS Error, Use Form 843

When you need penalty relief due to reasonable cause, or you want interest abated for IRS delay, use Form 843. Attach a clear, dated timeline, your evidence, and the relevant penalty information. Keep the packet simple and fact driven.

Practical steps you can apply today:

• Keep a one page chronology with the due date you missed, the dates of the event that caused the miss, when the impediment ended, and when you acted to fix it.
• Include copies of notices, hospital or medical records, disaster declarations, or written IRS advice you relied on.
• If First Time Abate might apply, document a clean filing and payment history for the prior three years.

First Time Abate, Check Before You Build A Thick Packet

The IRS may waive certain penalties one time if you have a clean compliance history. They call it First Time Abate. You may be eligible for Failure to File, Failure to Pay, or Failure to Deposit on a single period. Check FTA first. If you qualify, you save hours of evidence gathering.

What we do in practice:

• Call the number on the notice and ask whether the account meets FTA criteria, then document the call in the workpapers.
• If denied, pivot to a written Form 843 with reasonable cause evidence, and keep the timeline tight.

Extensions, Time To File, Not Time To Pay

Form 4868 buys you time to file, usually until mid October, but it does not buy time to pay. The payment is still due by the April deadline. Pay what you can by April, then use 4868 to avoid the larger Failure to File penalty. Keep the payment confirmation with the file so reviewers are not chasing it at the last minute.

Key moves:

• If you are missing documents in April, estimate, pay, and extend. Save the electronic payment confirmation, and store it with the return’s extension acknowledgment.
• Set a post extension milestone so the return does not drift into the fall crunch.

If Your Goal Is Spouse Relief, Match The Right Form To The Right Problem

These two are easy to mix up under peak pressure. They solve very different issues.

Injured Spouse, Use Form 8379

Your joint refund was offset to pay your spouse’s separate debts, and you want your share back. File Form 8379, Injured Spouse Allocation. You can file it with the joint return, with an amended joint return, or by itself after the offset notice arrives. Include W 2s and 1099s that show your own withholding. Set expectations with the client that processing can take weeks.

What to prep:

• Proof of your income and withholding, copies of W 2s and any 1099s with withholding, and the offset notice.
• A simple allocation worksheet that traces your share of the refund, adjusted for community property rules when they apply.

Innocent Spouse, Use Form 8857

Your joint return understated tax because of your spouse’s items, and you did not know or have reason to know. Request relief on Form 8857. The IRS considers innocent spouse, separation of liability, and equitable relief based on your facts, your timing, and fairness. The agency will contact the other spouse, so be ready for that step.

What we include:

• A clear statement of what you knew when you signed, your access to records, and any relevant abuse or coercion facts if applicable.
• Copies of notices, transcripts, bank or payroll records, and any documents that show reliance or lack of access.

Quick Decision Aid, Federal Forms Side by Side

Purpose	Correct Form	You Use It When	Core Evidence
Penalty abatement, reasonable cause	Form 843	Illness, disaster, death, or written IRS advice led to a miss	Timeline, notices, records of the event, proof of corrective action
Interest abatement for IRS delay	Form 843	IRS managerial or ministerial delay caused interest to grow	Proof of delay period, notices, transcripts
First Time Abate	Ask or write, no special form	Clean prior 3 year history for eligible penalties	Account history, call notes, follow up letter if needed
Injured spouse	Form 8379	Joint refund taken for spouse’s debts, you want your share	W 2s, 1099s, offset notice, allocation support
Innocent spouse	Form 8857	Joint return understated tax from spouse’s items	Statement of facts, notices, records, criteria from Pub 971
Extension to file	Form 4868	You need more time to file, but you will pay by April	Payment confirmation, extension acknowledgment

California Items People Often Mix Into “13980” Conversations

You may be managing multi state returns and hear team members talk about California forms while they try to fix a federal penalty issue. Here is what those California items actually do.

Nonresident Withholding Relief, FTB 588 or FTB 589

If a nonresident expects a lower California liability than default withholding, they request a waiver or reduced rate with the Franchise Tax Board, not the IRS. Use FTB 588 for a waiver or FTB 589 for a reduction. This is a withholding adjustment process. It is not a penalty abatement path.

Lump Sum Distribution Tax, Schedule G 1 and Federal Form 4972

California Schedule G 1 lets qualified recipients compute the separate tax on a lump sum distribution using California’s methods, which generally track the federal Form 4972 rules. The birth date test and the once per participant rule still matter. Use G 1 with Form 540 or 540NR and the 1099 R. Keep it separate from any penalty relief track.

What An Extension Really Covers, And What It Does Not

• What it covers, more time to file your return.
• What it does not cover, more time to pay. Interest accrues on unpaid balances after the April due date, and Failure to Pay can apply until you pay.

If you manage firm delivery, bake this into your April playbook:

• Estimate and pay by the April deadline, then file Form 4868 to protect against the higher Failure to File penalty. Keep the payment confirmation in the workpapers so your reviewer is not hunting for it at close.

Evidence That Moves The Needle, A Reviewer’s Checklist

Your file wins or loses on clarity. I ask my team to aim for a five minute reviewer read.

For Form 843, Reasonable Cause

• One page timeline, with the exact due date, the exact event dates, when the impediment ended, and when you acted.
• Exhibits in order, labeled and dated, for example hospital discharge summary, FEMA notice, IRS correspondence, or written IRS advice you relied on. Tie each exhibit to a fact in the timeline.
• If you are using interest abatement for IRS delay, identify the delay period and attach transcripts or letters showing IRS actions. Stick to facts and dates.

For First Time Abate

• Note the penalty type and the periods reviewed.
• Document the three prior years with no disqualifying penalties or confirm that any prior penalties were removed for reasons that do not block FTA.
• Call the number on the notice and document the call outcome. If declined, pivot to Form 843 with reasonable cause.

For Injured Spouse, Form 8379

• W 2s and 1099s showing each spouse’s withholding and income items.
• The offset notice and a clean allocation that aligns with community property rules if applicable.

For Innocent Spouse, Form 8857

• A clear statement of why you did not know, access limits, or abuse factors if relevant.
• Notices, transcripts, and any supporting third party records. Keep personal details respectful, factual, and necessary.

For Extensions, Form 4868

• Payment confirmation with date and amount, or electronic acknowledgment.
• A next action date for your team so the return does not drift and create an October crush.

Quick sanity check, if a preparer writes “using Form 13980 to allocate withholding,” stop and correct. Withholding credit and penalty computations flow through the return, payments, and if needed, Form 843 or spouse relief forms, not Form 13980.

Special Rules You Asked About, Cleaned Up

Individuals in Disasters or Combat Zones

The IRS sometimes grants automatic filing and payment relief for federally declared disasters or for those serving in combat zones. Check the current IRS notices for the dates and counties covered, then document the address and the period that qualifies. Extension rules can change when a relief notice applies.

Estates and Trusts

For qualified lump sum distributions, compute tax on the full distribution first, then allocate among beneficiaries by share. Keep every 1099 R with box references in the workpapers. If you are asking for penalty relief on an estate or trust return, that still goes through Form 843 or FTA pathways, not through Form 13980.

Corporations

Section 6015 spouse relief is an individual remedy for joint filers. Corporations cannot request innocent spouse relief. Corporate penalty issues follow corporate procedures, for example Form 843 for specific penalties or FTA for eligible corporate penalties.

Security, Documentation, And Workflow Discipline

• If you lead a firm, you already know the real blocker is not clients, it is delivery. Your team gets trapped in review loops when evidence is scattered, file names are inconsistent, and status is unclear. Two moves help immediately.
• Standardized workpapers with consistent naming, version control, and a one page summary at the front.
• SLA clarity, so reviewers see cases in the right order, with the right exhibits, and no one is guessing about deadlines.
• If you need help building predictable capacity, Accountably can integrate trained offshore teams into your workflow with SOPs, structured workpapers, and layered review so partners spend less time in review and more time on client strategy. Use this when you want surge capacity without chaos, then measure revision counts over the next cycle.

Step by Step Playbooks

Penalty Relief, Reasonable Cause, Form 843

• Confirm eligibility, is First Time Abate possible, or do facts support reasonable cause.
• Build the timeline and collect exhibits, tie each exhibit to a specific fact.
• Draft a crisp statement, two to three paragraphs, then attach the exhibits.
• File per instructions, then calendar a 30 day follow up. If denied, consider Appeals.

First Time Abate

• Check the prior three years for disqualifying penalties.
• Call the IRS number on the notice, request FTA, and document the call.
• If approved, confirm the penalty and related interest were adjusted. If denied, go to Form 843.

Injured Spouse, Form 8379

• Gather W 2s and 1099s for both spouses, highlight withholding.
• Complete Form 8379 and file with the return, amended return, or by itself after the offset notice.
• Track processing time and set expectations, it can take weeks.

Innocent Spouse, Form 8857

• Review the criteria for innocent, separation of liability, or equitable relief.
• Draft your narrative carefully, focus on knowledge, access, and fairness.
• File Form 8857 and prepare for the IRS to contact the other spouse.
• Calendar follow ups at 60 and 120 days, these cases can take months.

Extensions, Form 4868

• Calculate a safe estimate by the April due date, then pay electronically and select extension. Save the confirmation.
• If you cannot pay fully, pay what you can, then set up a payment plan after filing if needed.
• Track the return in your work management system, link the extension payment proof, and schedule the next prep milestone.

People Also Ask, Answered Fast

Does Form 13980 give me penalty relief or reallocate my withholding?

No. Form 13980 is a VITA grant reporting form. For penalty relief, use Form 843 or ask for First Time Abate. For spouse relief, use Form 8857 or 8379 depending on the issue. For interest abatement due to IRS delay, that is also Form 843.

Will an extension stop interest and penalties?

An extension gives you more time to file, not more time to pay. Interest still accrues on unpaid tax after the April due date, and Failure to Pay can apply until you pay.

How do I check whether First Time Abate applies before I build a big file?

Call the number on your IRS notice and ask if the account meets FTA criteria, then document the call. If not, you can still pursue reasonable cause via Form 843.

What if identity issues are holding up my return?

Consider an IP PIN if identity risks are present. You can retrieve or obtain an IP PIN through IRS channels, then document the number securely and add it to the filing controls for next year.

Can a corporation file for innocent spouse relief?

No. Section 6015 spouse relief applies to individuals on joint returns. Corporate penalty matters follow separate procedures that may include First Time Abate or Form 843 where permitted.

Avoiding Review Bottlenecks, My Short List For Firm Ops

• Use standard workpaper names, for example 01_Timeline.pdf, 02_Notices.pdf, 03_Evidence.pdf, so reviewers can scan fast.
• Put the timeline up front, two to three paragraphs, then exhibits. Reviewers should not search for the story inside a stack of PDFs.
• Tag every extension payment in your system with date, amount, and confirmation number. Link it to the client return and the 4868 acknowledgment.
• For spouse reliefs, store W 2s and 1099s by spouse and year, then allocate in a simple sheet that mirrors the instructions.
• For California withholding relief, calendar FTB processing windows so clients do not expect instant approvals.
• For lump sum distributions, keep a clean packet that ties 1099 R box amounts to the federal and state schedules to reduce rework during review.

E E A T And Trust Signals You Can Add In Minutes

• Cite the current IRS or FTB resource in your memo and add the last reviewed date if available.
• Stick to facts, dates, and core definitions. Avoid jargon in client facing letters.
• Add a short disclosure of process where helpful, for example that your team uses standardized workpapers and layered reviews to improve accuracy.

When Offshore Capacity Helps

There are weeks when your reviewers are buried and penalty files pile up. If you are not ready to hire again, structure helps more than headcount. Accountably can supply disciplined offshore teams that work in your templates, inside your systems, and follow your review notes, so you get predictable turnaround without giving up control. Use this for seasonal surge and standardize documentation. Track revision counts across two cycles to confirm the lift.

Compliance Notes And Year Stamps

• This guide is current as of October 29, 2025.
• Always confirm the latest IRS and FTB instructions, addresses, and cutoffs before filing or advising.
• Keep copies of everything, including mailing proofs, electronic payment confirmations, and call notes with dates and names.

FAQs

What is the IRS form to cancel all debt?

There is no single form that cancels tax debt. You can request relief through specific programs, for example penalty abatement via Form 843, payment plans, or, in rare cases, an offer in compromise. The right path depends on your facts and your type of liability.

Who needs to file Form 8880?

File Form 8880 to claim the Saver’s Credit if you made eligible retirement contributions and meet current income thresholds and other criteria. This is unrelated to penalty relief or spouse relief.

Who files Form 1040?

Individuals file Form 1040 when they meet filing requirements based on income, filing status, or special taxes and credits. Thresholds change, so check the current year instructions.

What is Form 15080?

For California penalty relief, use the current FTB processes. For nonresident withholding, use FTB 588 or 589. For lump sum distribution tax, use Schedule G 1. Always confirm the exact form numbers on the FTB site for your year.

Summary, Your Next Three Moves

• Match the goal to the form. Penalties and interest adjustments usually go through Form 843 or First Time Abate. Injured spouse is Form 8379. Innocent spouse is Form 8857. Extensions use Form 4868. Form 13980 is none of these, it is a VITA grant reporting form.
• Build evidence that tells the story fast. Use a one page timeline, then exhibits. Keep dates front and center. Add a short cite to the current IRS or FTB instruction so any reviewer or appeals officer sees you grounded your approach in current guidance.
• Protect capacity. Standardize workpapers, set SLAs for review, and step out of reactive mode. If you need structured production help without chaos, bring in Accountably to run SOP driven files inside your systems and reduce last mile review time.

Disclaimer

This article is for general information as of October 29, 2025. Tax law changes, processing timelines, and addresses update often. Always confirm the latest IRS and FTB instructions before you file or advise a client. If the matter is high stakes, talk with a qualified tax professional or counsel.