Why have some people asked for 85% waiver for Federal tax underpayment penalty?

[manbeing]

I read questions/answers posted here and noticed people asked for 85% waiver for Federal tax underpayment penalty. Is it a specific reason for 85% waiver? I know IRS released a note in Jan 2018 that they will waive the penalties if tax payer has paid 85% tax liability in 2018, but it is not related to 85% waiver.

Thanks.

[TerryA · Accepted solution]

You have it right that the IRS will grant a waiver if 85% is paid (normally 90%) and that's due to the many changes in the tax code from the TCJA and the Budget Act of 2018. The IRS recognizes that people may have a hard time accurately estimating their taxes for 2018 so they're giving us a little break this year.

[manbeing]

I understand that. My question was why many people here asked to waive 85% penalty,not 100% or other percentage. Is it because of some rule from IRS?

[TerryA]

Yes, the IRS has established the "85%" waiver

[manbeing]

could you explain it in details?

[TerryA]

The IRS explains it better than I could in the Form 2210 instructions (and the Form):
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/i2210.pdf">https://www.irs.gov/pub/irs-pdf/i2210.pdf</a>
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/f2210.pdf">https://www.irs.gov/pub/irs-pdf/f2210.pdf</a>

See "Waiver of Penalty" and "Tax reform waiver" under that on page 2 of the instructions