IRS Tax Resolution Specialists

IRS Penalty Abatement Help

Q: What is First-Time Abatement?

FTA is an IRS program that allows penalty removal for taxpayers who have no penalties in the prior 3 years. It applies to failure-to-file and failure-to-pay penalties. It is one of the easiest forms of penalty relief to request.

Q: Does abatement also remove interest?

Generally, no. IRS interest follows the penalty. If the penalty is reduced or removed, the interest on that penalty may also be reduced, but stand-alone interest abatement is rare and only applies in specific circumstances.

Q: Do I need to be compliant before requesting abatement?

Generally yes. Penalty abatement is most effective when you are in compliance — all required returns filed and current on payments.

Q: Can I request penalty abatement on my own?

You can request FTA directly from the IRS, but working with a licensed professional ensures you understand which penalties qualify and how to frame a reasonable cause argument if applicable.

IRS penalties and interest can grow your balance faster than most people realize. What started as a manageable tax bill can balloon into something much larger — but some penalties may be reducible. Understanding your options is the first step.

Get My Free IRS Risk Score → Book Free Consultation

Or call: (855) 473-2829 • 100% Confidential • No Obligation

Understanding IRS Penalties and Interest

The IRS charges several types of penalties that can significantly increase your total balance. These penalties compound with interest over time.

Failure-to-File Penalty

5% of unpaid tax per month, up to a maximum of 25%. This is one of the largest penalties the IRS charges and grows quickly on unfiled returns.

Failure-to-Pay Penalty

0.5% of unpaid tax per month, up to 25%. Even if you filed on time but couldn't pay, this penalty continues to accrue until the balance is paid.

Accuracy-Related Penalty

20% of underpayment in certain cases where the IRS determines there was negligence, substantial understatement, or other inaccuracy on a filed return.

Trust Fund Recovery Penalty

A separate penalty that applies to business payroll tax situations. Can be assessed personally against business owners or officers. See our business payroll tax page.

In addition to penalties, the IRS charges interest on unpaid balances and on unpaid penalties, compounding the total amount owed over time. The longer a balance remains unpaid, the more significant the impact of interest.

What Is Penalty Abatement?

Penalty abatement is the IRS's process for reducing or removing certain penalties from your account. Two of the most common pathways are:

First-Time Penalty Abatement (FTA)

If you have no penalties for the prior 3 tax years, you may qualify for a one-time abatement of failure-to-file or failure-to-pay penalties.

This is one of the most accessible and underutilized IRS relief programs. Many taxpayers who qualify never request it.

Reasonable Cause

If you have a legitimate reason for failing to file or pay — such as a serious illness, natural disaster, or circumstances genuinely beyond your control — you may request abatement based on reasonable cause.

Documentation is required. The IRS evaluates each request individually.

Important: Abatement is not guaranteed and depends on IRS review of your individual circumstances. Interest cannot generally be abated unless the penalties themselves are removed. Results vary.

What We Review in Your Case

Penalty abatement is not a one-size-fits-all request. We evaluate your full situation before determining whether and how to pursue it.

✓

Prior 3 years of compliance history

To determine FTA eligibility — clean history is the key qualifier.

✓

Documentation for reasonable cause

Medical records, disaster documentation, or other supporting evidence.

✓

Whether penalties are on the correct tax years

IRS errors in penalty assessment do occur and can be challenged.

✓

Strategic fit within your resolution plan

Whether pursuing abatement makes sense alongside an OIC, payment plan, or other strategy.

Related Resolution Options

Penalty abatement is often one part of a broader resolution strategy. Depending on your situation, other options may also apply.

Offer in Compromise

Potentially settle for less than the full balance

Installment Agreement

Structured payment plan over time

Blog: CP14 Notice

Got an IRS balance due notice? Start here.

Common Questions

Can the IRS remove all my penalties?

Not all penalties can be removed. Eligibility depends on the type of penalty, your compliance history, and whether you meet IRS criteria. Abatement is not guaranteed, and results vary based on individual circumstances.

What is First-Time Abatement?

First-Time Abatement (FTA) is an IRS administrative waiver that allows penalty removal for taxpayers who have no penalties in the prior 3 tax years. It applies to failure-to-file and failure-to-pay penalties and is one of the most accessible forms of penalty relief available.

Does abatement also remove interest?

Generally, no. IRS interest accrues on penalties in addition to the underlying tax balance. If a penalty is reduced or removed, the interest associated with that penalty may also decrease — but stand-alone interest abatement is rare and only available in very specific circumstances.

Do I need to be compliant before requesting abatement?

Generally yes. Penalty abatement requests are most effective when you are in full compliance — all required returns filed and payments current. An open compliance issue can undermine or delay an abatement request.

Can I request penalty abatement on my own?

You can request FTA directly from the IRS by calling the number on your notice. However, working with a licensed professional ensures you understand which penalties qualify, whether reasonable cause may apply, and how to frame your request most effectively.

Ready to Know Where You Stand?

The longer the IRS goes unanswered, the fewer options you have. Take the free assessment or book a call today.