Penalty Abatement
The removal or reduction of IRS penalties. The IRS publishes three routes: administrative relief, reasonable cause, and statutory exception.
Full Definition
Penalty abatement is the removal or reduction of penalties assessed by the IRS for late filing, late payment, or other failures. The IRS publishes three routes: administrative relief (First Time Abate, which it states is transitioning to Automatic Exemption from Penalty starting summer 2026), reasonable cause, and statutory exception. Common penalties that can be abated include the failure-to-file and failure-to-pay penalties, each of which the IRS caps at a maximum of 25%. On interest, the IRS draws a line: it states it will automatically reduce or remove the interest RELATED TO A PENALTY when that penalty is reduced or removed, but that it does not remove or reduce interest for reasonable cause or as first-time relief, and reduces interest on the tax itself only where the interest was applied because of an unreasonable error or delay by an IRS officer or employee.
What to do next
Check the notice or letter you actually received: the dates and instructions printed on it govern, not this page. The IRS page linked in Sources is the authority on the rule itself.
Sources
- Failure to file penalty — Internal Revenue Service, retrieved 2026-08-20
- Failure to pay penalty — Internal Revenue Service, retrieved 2026-08-20
- Penalty relief for reasonable cause — Internal Revenue Service, retrieved 2026-08-20
- Administrative penalty relief (First Time Abate) — Internal Revenue Service, retrieved 2026-08-20
- Interest — Internal Revenue Service, retrieved 2026-08-21
Last reviewed 2026-08-21 by Tax Resolution Clarity editorial.
Sourced to primary IRS materials and editorially reviewed. Not reviewed by a tax professional. Not tax advice.
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Where to go next
The IRS publishes the rules this page describes. Your own notice governs your dates.