The IRS assesses tens of billions in penalties each year — and abates a meaningful portion when properly requested. Two paths exist: First-Time Abatement (FTA) administrative waiver, and Reasonable Cause under IRC §6664.
An at-a-glance view of every step covered in this guide.
Administrative waiver of failure-to-file, failure-to-pay, and failure-to-deposit penalties for a single tax period. Requires: no penalties in the prior 3 years, all returns filed, and payment or IA in place. Available once per taxpayer per penalty type on a rolling basis.
Under IRC §6664(c), penalties are abated when the failure was due to reasonable cause and not willful neglect. Common substantiated causes: serious illness, death in family, natural disaster, records destroyed, reliance on tax professional (narrow). Requires a written explanation with corroborating documentation.
Interest is statutory and generally not abatable — but abating the underlying penalty also abates the interest that accrued on that penalty.
Failure-to-file plus failure-to-pay penalties can reach 47.5% of the balance. Full abatement across periods can eliminate tens of thousands.
Yes. For balances typically under $25,000, an IRS representative can grant First-Time Abatement on the call once eligibility is verified — no Form 843 required.
The IRS looks for events outside the taxpayer's control: serious illness, hospitalization, death of an immediate family member, natural disaster, or destruction of records. Generic 'I was too busy' or 'I forgot' explanations are denied.
A licensed tax attorney will pull your IRS transcripts, review your situation, and walk you through the resolution options that fit — no obligation.