Penalty Abatement
Get IRS penalties removed or reduced and keep more of your money where it belongs.
Check If You QualifyWhat Is Penalty Abatement?
Penalty abatement is the process of requesting that the IRS remove or reduce penalties that have been added to your tax debt. These penalties can significantly increase what you owe, sometimes adding 25% or more to your original tax liability.
The IRS has specific provisions that allow penalties to be removed under certain circumstances. Whether you qualify depends on your tax history, the reason for the penalty, and your current compliance status.
Many taxpayers don't realize they may be eligible for penalty relief. A successful abatement request can save you thousands of dollars and make your tax debt much more manageable.
Types of Penalty Relief
First-Time Penalty Abatement
If you have a clean compliance history for the past three years, you may automatically qualify for first-time relief.
Reasonable Cause Relief
If circumstances beyond your control prevented compliance, you may qualify for penalty removal based on reasonable cause.
Statutory Exceptions
Certain situations qualify for automatic penalty relief under IRS rules, such as federally declared disasters.
Administrative Waiver
The IRS may waive penalties in certain situations based on administrative policies and guidelines.
Common IRS Penalties
These are the most common penalties that may be eligible for abatement:
Failure to File Penalty
- 5% of unpaid taxes per month
- Maximum of 25% of unpaid taxes
- Applied when you don't file by the deadline
- Often the most significant penalty
Failure to Pay Penalty
- 0.5% of unpaid taxes per month
- Maximum of 25% of unpaid taxes
- Applied when you don't pay by the deadline
- Compounds with interest over time
Frequently Asked Questions
What is first-time penalty abatement?
First-time penalty abatement (FTA) is an administrative waiver that removes failure-to-file or failure-to-pay penalties if you have a clean compliance history for the previous three tax years. You must have filed all required returns and have no penalties during that period.
What qualifies as "reasonable cause"?
Reasonable cause includes circumstances beyond your control such as serious illness, death in the family, natural disasters, inability to obtain records, or reliance on incorrect advice from a tax professional. You'll need to provide documentation supporting your claim.
How much can I save with penalty abatement?
Savings depend on your specific penalties. Failure-to-file and failure-to-pay penalties can add up to 47.5% of your unpaid taxes over time, plus interest. Successful abatement can remove these amounts entirely.
Can I request penalty abatement myself?
Yes, you can request abatement by calling the IRS, writing a letter, or using Form 843. However, working with a professional can improve your chances, especially for reasonable cause requests that require proper documentation and presentation.
Could You Qualify for Penalty Relief?
Take our free 2-minute assessment to find out if penalty abatement or other relief options may be available for your situation.
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