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IRS Penalty Abatement
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Estimate IRS penalties and interest, and read what the IRS publishes about First-Time Abatement and other penalty relief. Relief is decided by the IRS case by case.

Takes 2 minutes
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Based on IRS guidelines
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Eligibility
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Tell us about your tax situation

We will calculate the penalties and interest that have accrued.

Enter the tax amount before penalties and interest

Usually April 15 of the year after the tax year

Leave blank if not yet filed

Leave blank if not yet paid (will use today)

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Understanding IRS Penalties

The IRS assesses two main types of penalties for late or unfiled tax returns: the Failure-to-File Penalty and the Failure-to-Pay Penalty. Understanding how these work is key to managing your tax debt.

Failure-to-File Penalty

This penalty is 5% of your unpaid taxes for each month (or partial month) that your tax return is late. The maximum penalty is 25% of your unpaid taxes.

Example: $10,000 owed, 6 months late = $2,500 penalty (25% max)

Failure-to-Pay Penalty

This penalty is 0.5% of your unpaid taxes for each month (or partial month) that the tax remains unpaid. The maximum penalty is 25% of your unpaid taxes.

Example: $10,000 owed, 12 months unpaid = $600 penalty (6%)

First-Time Penalty Abatement (FTA)

The IRS offers First-Time Penalty Abatement to taxpayers who have a clean compliance history. To qualify, you must meet these criteria:

  • Filed all currently required returns or filed an extension
  • Paid or arranged to pay any taxes due
  • No penalties for the 3 prior tax years (or any penalties were removed for an acceptable reason)

The IRS lists failure to file, failure to pay and failure to deposit as eligible for First Time Abate, regardless of amount.

Important: The IRS states it will automatically reduce or remove the interest related to a penalty if the penalty is reduced or removed. Interest continues to accrue on any unpaid balance, including penalties, until the tax is paid in full.

Disclaimer: This calculator provides estimates based on IRS guidelines. Actual penalties may vary based on your specific situation and IRS calculations. Consult a tax professional for advice specific to your situation.