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The Form 6118 calls never start with the form. They start with a preparer who already paid a penalty under section 6695, assumed the matter was closed, and only later realized the assessment was wrong on the facts. By then the money is out the door and the question is whether the refund claim gets filed correctly and on time.
Form 6118 is the IRS claim for refund of preparer and promoter penalties paid under sections 6694, 6695, 6700, and 6701. File it with the specific office that issued the notice and demand, generally within three years of paying a 6694 or 6695 penalty in full or within two years for a 6700 or 6701 promoter penalty. One detail people miss: appraiser penalties under section 6695A use Form 843, not this form.
Key Takeaways
- Form 6118 is the IRS‑prescribed form to claim a refund or credit of paid preparer penalties under IRC §§ 6694 and 6695. It is not optional if you want to preserve refund‑suit rights.
- File with the specific IRS campus or office that mailed the notice and demand, not a general service center.
- Timing matters. You generally have three years from the date the IRS received your payment or credit to file. That three-year window is the rule for §§ 6694 and 6695 preparer penalties; refund claims for §§ 6700 and 6701 promoter penalties run on a shorter two-year window, so do not assume one deadline covers every penalty type. For consolidated claims, the clock runs from the earliest payment included.
- Your claim must include precise identification, penalty details, and a verified factual and legal statement, signed under penalties of perjury.
- Use Form 843, not Form 6118, for § 6695A appraiser penalties.
- Offsets and interest: the IRS can credit an overpayment against your other liabilities, and overpayment and underpayment interest follow §§ 6611 and 6601.
- To file a refund suit, you must first file a proper claim, then follow the two‑year suit window in § 6532 if the IRS disallows the claim.
What Form 6118 Is, Who Uses It, And Why It Exists
Form 6118 is the IRS’s prescribed vehicle for a paid preparer to request a credit or refund of preparer penalties imposed under IRC §§ 6694 and 6695. The regulation that controls claims by preparers is § 1.6696‑1. It expressly says Form 6118 is the required form for §§ 6694 and 6695, while Form 843 is used for § 6695A appraiser penalties. That split trips up even seasoned practitioners, so keep it top of mind as you triage your notices.
You use Form 6118 when you, as the preparer, have paid or been credited for a penalty and you believe it was wrong as a matter of fact or law. The regulation also tells you where to file, how consolidation works, and the three‑year limitations clock that starts on the date payment is received or credited by the IRS.
Here is the heart of the rule set in plain English:
- The form is mandatory for §§ 6694 and 6695 claims. You cannot skip it.
- File with the exact IRS campus or office that issued your notice and demand. Do not reroute it to your usual filing address.
- You generally have three years from the date of payment or credit to file, and consolidation restarts timing based on the first payment included. Timely mailing and weekend‑holiday rules under §§ 7502 and 7503 apply.
- Your claim must be detailed, supported, and signed under penalties of perjury, which the form itself requires at signature.
Pain First, Then The Fix
If your firm is like most, the penalty did not happen because you lack clients, it happened because delivery broke under pressure. Production spikes, inconsistent workpapers, and review loops create avoidable risk. The good news is you can put structure around both the claim and the root‑causes. In this guide, I will walk you through the “what, how, and wow” of Form 6118 so you can file with confidence, avoid rework, and protect your rights to litigation if you need it.
- What you need to include so your claim is complete.
- How and where to file so it is timely and properly routed.
- Wow extras like consolidation rules, offsets, interest, and a quick penalty‑amounts table for the 2025 filing season.
Pro tip, file Form 6118 first to preserve rights, then manage suit timing under § 6532 only after you receive a disallowance or six months pass with no action. Keep proof of mailing.
Where To File, When To File, And What Must Be Inside
Where to file
Send your Form 6118 to the IRS campus or office that issued the penalty notice and demand. The regulation is explicit about this point, and it is one of the most common routing errors. If two different campuses assessed penalties, you file separately with each.
Deadlines you cannot miss
- General rule, three years from the date the IRS received your payment or the date a credit satisfied the penalty. That three-year clock governs §§ 6694 and 6695 preparer penalties; claims for §§ 6700 and 6701 promoter penalties must be filed within two years of payment, so confirm which deadline applies before you calendar it. The regulation treats a credit date as the payment date for this clock.
- Consolidated claims are allowed in specific cases, but the filing deadline is measured from the earliest payment in that bundle, which shortens your window if you are not careful.
- Timely mailing equals timely filing, and weekend or holiday rules apply.
There is a special no‑statute rule you should know, and it surprises many. If a final administrative or judicial determination later shows there was no understatement of the client’s liability, § 6694(d) requires abatement, and if you already paid, a refund issues without regard to any limitations period. You still use Form 6118 to invoke it.
Everything the IRS expects to see in a complete claim
Pull these items before you draft:
- Your exact legal name, SSN or EIN (enter your SSN if you are self-employed or employed by another preparer; enter your EIN if you are the employer of other preparers or promoters), and both the address used on the returns and the address where the IRS mailed the notice.
- The IRS campus or office name, each notice date and number, and the document locator number if listed.
- A penalty‑by‑penalty breakdown, including type, amount assessed, amount paid, payment date, taxpayer name and TIN, form, and tax year.
- A detailed factual and legal statement for each penalty, verified and signed under penalties of perjury on the form’s signature block.
That last line is not window dressing. The regulations require a claim to set out each ground with facts that apprise the IRS of the exact basis, and they must be verified by a written declaration under penalty of perjury. The Form 6118 signature block contains the perjury declaration, so sign carefully and keep a copy.
Consolidation rules in plain English
The form’s instructions allow limited consolidation, and they disallow others:
- You can combine certain § 6695 administrative penalties, such as failure to furnish copy, failure to sign, failure to furnish identifying number, and failure to retain copy or list, if the same IRS office imposed them, subject to grouping rules by statement.
- You cannot consolidate items that come from different campuses, nor can you mix in § 6694 understatement penalties with the administrative items.
- Some pairs, like the old § 6695(e)(1) and (e)(2) recordkeeping items, can be combined if billed on the same statement. The form’s grid shows the allowed combinations.
Offsets, interest, and why your refund might not be a check
Even if your claim is allowed, the IRS may apply your overpayment to other outstanding liabilities first, then send only the remainder. That is spelled out in § 1.6696‑1(h). If interest is due, overpayments accrue interest under § 6611, while interest on unpaid assessable penalties after notice and demand is handled under § 6601. Plan your cash expectations accordingly.
Field note, keep postal receipts and tracking. If you must litigate, § 6532 sets the two‑year suit clock after a notice of claim disallowance, and courts will expect you to prove what you filed and when.
Form 6118 Versus Form 843, Plus The 2025 Penalty Amounts You Asked About
When Form 843 applies
There is one big exception to the 6118 rule. For § 6695A appraiser penalties, the regulation prescribes Form 843, not Form 6118. If you are handling valuation misstatement issues involving appraisers, switch forms. For all other preparer penalty claims under §§ 6694 and 6695, stay on Form 6118.
2025 amounts for common preparer penalties
Here is a quick, current snapshot for the 2025 filing season. The IRS table for preparer penalties confirms 2025 inflation adjustments for several § 6695 items, while § 6694 amounts remain the fixed statutory figures described below. Verified as of January 28, 2026.
| Penalty | Code section | 2025 amount | Annual max, if any | Notes |
| Failure to furnish copy | § 6695(a) | 60 per failure | 31,500 | Per return filed in calendar year 2025 |
| Failure to sign return | § 6695(b) | 60 per failure | 31,500 | Same as above |
| Failure to furnish identifying number | § 6695(c) | 60 per failure | 31,500 | One per return |
| Failure to retain copy or list | § 6695(d) | 60 per failure | 31,500 | Per return period |
| Failure to file correct info returns | § 6695(e) | 60 per failure | 31,500 | Applies to § 6060 listings |
| Negotiation of check | § 6695(f) | 635 per check | No max | Annual inflation adjusted |
| Due diligence failures | § 6695(g) | 635 per failure | No max | Credits and head of household eligibility |
| Understatement due to unreasonable position | § 6694(a) | 1,000 or 50% of income from prep, whichever is greater | N, A | Fixed in statute |
| Willful or reckless conduct | § 6694(b) | 5,000 or 75% of income from prep, whichever is greater | N, A | Fixed in statute |
Sources for these numbers: IRS “Tax preparer penalties” page and IRM references for context.
Important, the draft line you may have seen about “590 or 1,180 in 2025” does not apply to § 6694. The correct 2025 inflation‑adjusted amount that lands near that range is the § 6695(g) due diligence penalty at 635 per failure. The § 6694 penalties remain 1,000 or 50 percent, and 5,000 or 75 percent.
Refund suits, waiting periods, and the two‑year window
Once you file a proper claim, you generally must wait six months before filing a refund suit, unless the IRS acts sooner. If the IRS mails a formal disallowance, you have two years from that date to bring suit, subject to any written extension. These timing rules live in § 6532 and the related regulations. Keep your calendar tight, because reconsideration after disallowance does not extend the suit period.
Practical example, consolidated claim
Say you received three § 6695(d) penalties from the same campus, paid on April 5, April 15, and June 2 of 2025. You can consolidate them on one Form 6118, but your three‑year clock runs from April 5, 2025, the earliest payment. That means your Form 6118 must be filed so it is timely under that earliest date, with timely mailing rules available if the deadline falls on a weekend or holiday.
Guardrails, do not combine penalties from different IRS offices or campuses on one form. The instructions forbid it, and it can slow your claim or cause a misroute.
A Clean Filing Workflow You Can Reuse Each Time
- Pull every notice and Statement DLN, then open a single index worksheet that mirrors the Form 6118 grid.
- Tie each penalty to a specific taxpayer, form, year, and payment date. Note the IRS office for routing.
- Draft your factual and legal grounds. Cite the specific regulation, Notice language, or controlling authority that cures the issue.
- Add exhibits, such as engagement letters, e‑file confirmations, workpaper extracts, correspondence logs, and staff training records.
- Complete Form 6118, sign the perjury declaration, and include your exhibits. Use a cover letter with a short issue‑fact‑law‑ask summary.
- Mail to the issuing office using certified mail, keep USPS proof and a full PDF scan set.
Common Mistakes And How To Avoid Them
Most rejected or stalled Form 6118 claims fail on the same handful of details, and every one of them is preventable with a checklist. Here are the patterns I flag most often.
Closing Guidance, Plus A Gentle Nudge On Process
You now have the practical checklist to handle Form 6118 correctly, from form choice and routing, to consolidation, timing, offsets, and interest. File a complete, verified claim, keep impeccable mailing proof, and track your suit windows. If your firm’s bottlenecks or documentation habits contributed to the penalty in the first place, fix those at the source so you are not filing the same claim next year.
At Accountably, we focus on the delivery side of the house. When your workpapers, reviews, and documentation are clean and consistent, you reduce penalty exposure, respond faster to notices, and if needed, assemble a strong Form 6118 package without chaos. Mention this guide to your team, align your internal checklist to it, and keep one calm folder for claims, exhibits, and proofs.
Note on freshness, amounts and rules above were verified against IRS sources and the Code as of January 28, 2026. Always confirm current figures and addresses before filing.
Mini‑Checklist You Can Copy
- Confirm the correct form by code section, 6118 for §§ 6694 and 6695, 843 for § 6695A.
- Build the penalty grid with taxpayer, form, year, amount, payment date, and campus.
- Draft a detailed, verified statement and sign the perjury declaration.
- File within three years of payment or credit, earlier if you consolidate.
- Track the six‑month wait and two‑year suit window if there is a disallowance.
- Expect offsets, then interest under §§ 6611 and 6601.
Reusable Checklists
These checklists are copy-paste ready for your firm SOPs. Drop them into your claims folder and work them top to bottom each time a preparer or promoter penalty notice lands.
Form 6118 claim packet
- Confirm the penalty falls under §§ 6694, 6695, 6700, or 6701, and is not a § 6695A appraiser item that belongs on Form 843.
- Enter your identifying number correctly: SSN if you are self-employed or work for another preparer, EIN if you employ other preparers or promoters.
- Record both the address shown on the underlying returns and the address where the IRS mailed the notice and demand.
- Identify the IRS office that issued the notice, with each notice date, number, and document locator number.
- Write a reasons statement for each penalty, keyed to its line number, with supporting facts and authority.
- Sign the perjury declaration on the form and keep a full copy.
Penalty grid build
- List each penalty by its type letter (A through M) from the Form 6118 table.
- For each line, capture amount assessed and amount paid, with the payment date.
- Add taxpayer name, taxpayer identification number, form number, and tax year.
- For § 6700 and § 6701 claims, complete only columns (b), (c), and (g) through (j).
- Total column (i) to set your Amount of Claim.
- Keep penalties from different IRS offices on separate forms; do not combine them.
Consolidation and early-claim check
- Combine § 6695 types C, D, E, and F only when the same IRS office imposed them.
- Combine types G and H only when they are billed on the same statement.
- File a separate Form 6118 for types A, B, I, J, K, L, and M; each needs its own form.
- For a § 6694, § 6700, or § 6701 penalty, decide whether to use the 15% partial-payment option within 30 days of notice and demand to file an early claim.
- Remember the 15% route does not apply to § 6695 penalties and does not reduce the balance owed.
Keep 6118 Season From Stalling
Form 6118 is not a calendar event you can plan around like a quarterly return. A preparer penalty under § 6694 or § 6695 lands whenever the IRS mails a notice and demand, and the refund-claim clock starts the moment you pay. The IRS pegs the form itself at about 67 minutes of work (per the Form 6118 instructions), but the real time sink is reconstructing the facts, exhibits, and authority for a penalty that may already be a year old.
The teams that recover these penalties cleanly do not scramble. They treat every preparer or promoter penalty notice as a standard intake, with a defined owner, a fixed packet, and a routing rule, so the three-year window for §§ 6694 and 6695 or the two-year window for §§ 6700 and 6701 never quietly closes.
- Open a single index worksheet that mirrors the Form 6118 grid, with columns for type letter, amount assessed, amount paid, and payment date.
- Tie each penalty to the IRS office that issued the notice so routing and consolidation are settled before drafting.
- Keep a reasons template that forces a fact-and-authority statement for each line, signed under penalties of perjury.
- Track the SSN-versus-EIN identifying-number rule so a claim is never bounced on a basic field.
- Calendar the refund deadline by penalty type the day payment posts.
This is the kind of structured, documented execution we build at Accountably. Our tax preparation and review teams keep workpapers, notices, and claim packets organized year round, so a preparer penalty becomes a clean, well-supported Form 6118 rather than a fire drill.
FAQs
What happens if an accountant does not file my taxes?
You still own the filing obligation. File as soon as possible to stop penalties and interest, document what happened, and consider reasonable‑cause abatement. If there is misconduct, you can report the preparer to the IRS and pursue civil remedies, but do not wait to file. This protects you first.
What evidence should I send with a Form 6118 claim?
Include the notice and demand, taxpayer identifiers, penalty breakdown, payment proof, return copies or transcripts, correspondence, engagement letters, and workpaper extracts that support your facts. Your statement must be verified and specific, then signed under penalties of perjury on the form.
Where do I send Form 6118?
Send it to the IRS campus or office that issued the penalty notice. If different campuses issued different penalties, file separate claims with each.
What are the preparer penalty amounts for 2025?
For § 6695 administrative items, most per‑failure amounts are 60 with a 31,500 cap per calendar year, while due diligence and check negotiation are 635 per failure with no cap. § 6694 understatement penalties remain 1,000 or 50 percent, and 5,000 or 75 percent.
When is Form 843 the right move?
Use Form 843 for § 6695A appraiser penalties. Use Form 6118 for §§ 6694 and 6695 preparer penalties.