Fresh Start Program
IRS Penalty Abatement
When penalties stack onto your tax bill, the balance can spiral fast. If you're eligible, IRS penalty abatement can reduce or remove those extra charges — helping you regain control and focus on resolving the underlying tax debt.
Key Insights
What Is IRS Penalty Abatement?
IRS penalty abatement is the process of reducing or removing penalties that the IRS adds when a taxpayer doesn't meet certain requirements — like filing or paying taxes on time. Part of the Fresh Start Program, penalty abatement provides vital relief to people who made an honest tax mistake. When penalties are applied, they can add up quickly — sometimes reaching 25% of the total amount owed. Penalty abatement gives taxpayers a chance to show the IRS that their failure to comply wasn't intentional and that they've since corrected the issue.
Types of IRS Penalty Relief
First-Time Penalty Abatement (FTA)
The FTA option is essentially a 'second chance' for people who normally follow the rules but made a one-time mistake. If you've been consistent in filing and paying taxes over the past three years but slipped up once, this relief option could remove penalties for that specific year.
Who It's For
Taxpayers with a clean compliance history
Common Circumstances
Generally compliant for the past 3 years, all required returns filed, tax paid or on a payment plan, one-time filing or payment mistake
Reasonable Cause Abatement
Sometimes life throws unexpected challenges your way. When that happens, the IRS allows for penalty relief based on reasonable cause. This form of relief depends on the facts and documentation you can provide — the IRS will look at whether you exercised ordinary care but were still unable to comply.
Who It's For
Taxpayers facing events beyond their control
Common Circumstances
Serious illness or death in the family; natural disaster; loss of essential records; other documented circumstances showing ordinary business care and prudence
Statutory Exceptions
While less common, the IRS also allows penalty relief when certain laws or internal errors apply. These exceptions are granted based on strict criteria, but when applicable, they can fully eliminate penalties that otherwise would have been unavoidable.
Who It's For
Taxpayers covered by specific legal or administrative provisions
Common Circumstances
Incorrect written advice from the IRS; federally declared disaster relief; timely mailed return not recorded; serving in a combat zone
Who Qualifies for Penalty Abatement?
How to Apply for IRS Penalty Abatement
The IRS uses Form 843 (Claim for Refund and Request for Abatement) to handle most written requests. You can send this form to explain your situation and request a reduction or refund of penalties. If you're applying for reasonable cause relief, include documentation such as medical records, insurance or FEMA documentation for disasters, copies of IRS correspondence, or evidence of timely mailing or payment attempts.
If Your Request Is Denied
If the IRS denies your request, you can file an appeal through the IRS Independent Office of Appeals within 30 days of receiving your denial letter. A new IRS representative will review your case independently from the original decision.
Frequently Asked Questions
Reduce or Remove Your IRS Penalties Today
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