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IRS Penalty Abatement

Penalty abatement allows you to have IRS penalties removed or reduced. This can significantly reduce your total tax debt since penalties can add 25% or more to your original balance.

Timeline

Phone requests can be resolved immediately

Cost

No cost to request penalty abatement

Success Rate

Very high for First-Time Abatement with clean history

Key Takeaways

  • Remove or reduce IRS penalties
  • Can save thousands in penalty charges
  • First-Time Abatement is quick and easy
  • No cost to request - can be done by phone

Best For

  • First-time penalty situations (clean compliance history)
  • Those with reasonable cause for late filing or payment
  • Taxpayers affected by disasters or emergencies
  • Those who relied on incorrect IRS advice

Requirements

  • 1
    For First-Time Abatement: Clean compliance history for past 3 years
  • 2
    For Reasonable Cause: Documentation of circumstances that caused the failure
  • 3
    Tax debt must be assessed (cannot abate estimated penalties)
  • 4
    Must have filed the return or paid the tax (depending on penalty type)

The Process

1

Identify Penalties

Review your IRS notice or transcript to identify the specific penalties.

2

Determine Eligibility

Check if you qualify for First-Time Abatement or have reasonable cause.

3

Gather Documentation

Collect evidence supporting your reasonable cause claim (if applicable).

4

Request Abatement

Call the IRS, send a letter, or submit Form 843.

5

Follow Up

If denied, you can appeal or request reconsideration with additional documentation.

Advantages

  • Can save thousands in penalty charges
  • First-Time Abatement is relatively easy to obtain
  • Can be requested by phone or in writing
  • Does not affect your ability to use other resolution options
  • Interest on abated penalties is also removed

Disadvantages

  • Only removes penalties, not interest or tax
  • First-Time Abatement can only be used once
  • Reasonable cause requires strong documentation
  • Some penalties cannot be abated

Frequently Asked Questions

What is First-Time Abatement?
FTA is an administrative waiver that removes failure-to-file and failure-to-pay penalties if you have a clean compliance history for the past 3 years (filed all returns, paid all taxes or had approved agreements).
What qualifies as reasonable cause?
Reasonable cause includes serious illness, death in family, natural disasters, fire/theft of records, incorrect IRS advice, or other circumstances beyond your control that prevented compliance.
Can I get interest removed too?
Interest can only be removed if it was caused by IRS error or delay. Interest on abated penalties is automatically removed.
What if my request is denied?
You can request an appeal or submit additional documentation for reconsideration. You may also be able to appeal to the IRS Office of Appeals or Tax Court.

Is Penalty Relief Right For You?

Use our free tools to see if you qualify and estimate your potential outcome.

Take the Quiz

Other Options

OIC

Taxpayers who cannot pay their full tax liability

Payment Plan

Taxpayers with steady income who can afford monthly payments

CNC Status

Taxpayers experiencing severe financial hardship

Details

Timeline

Phone requests can be resolved immediately. Written requests typically take 30-60 days.

Costs

No cost to request penalty abatement.

Success Rate

Very high for First-Time Abatement with clean history. Reasonable cause success varies based on documentation.