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If you qualify, the IRS will remove penalties for one tax year, no reason required. Here's how First-Time Penalty Abatement works. Call Tax Titans: (888) 684-4992.
There is an IRS penalty relief program that requires no documented hardship, no unusual circumstances, and no complex paperwork. You don't need to explain why you didn't pay. You don't need to prove an emergency. You just need to ask — and meet three eligibility criteria.
It's called First-Time Penalty Abatement, and the IRS will tell you about it if you specifically ask for it. They will not volunteer it.
First-Time Penalty Abatement (FTA) is an administrative waiver the IRS grants to taxpayers who have a clean compliance history. It removes failure-to-file, failure-to-pay, and failure-to-deposit penalties for a single tax period, with no reason required.
The IRS created FTA to reward taxpayers who generally comply with tax law but had one bad year. The logic is straightforward: someone who has filed and paid on time for years and then missed one year is meaningfully different from a chronic non-filer, and the IRS's penalty system should reflect that.
To qualify for First-Time Penalty Abatement, you must meet all three of the following:
1. Clean filing compliance: You must have filed all required tax returns for the prior three years — or have valid extensions for those years. The IRS will not grant FTA if you have unfiled returns.
2. Current payment compliance: You must have paid, or arranged to pay, any tax currently due. A balance you're paying through an installment agreement that's in good standing doesn't disqualify you.
3. No prior penalty history: You must not have had any penalties in the prior three tax years, other than an estimated tax penalty. A prior penalty the IRS removed for reasonable cause doesn't count against you.
If you meet all three criteria, you qualify. That's it. The IRS does not ask why you didn't pay. They don't require a hardship explanation. They don't need documentation of an emergency. You simply ask for the penalty to be removed. You don't even have to name First-Time Abatement: the IRS checks your account history and applies it if you qualify.
The failure-to-pay penalty is 0.5% per month, capping at 25% of the unpaid tax. The failure-to-file penalty is 5% per month, capping at 25%. Because the failure-to-file penalty is reduced by the failure-to-pay penalty for any month both apply, the two combined top out at 47.5% of the unpaid tax. On a $20,000 tax liability with maximum penalties, FTA could remove up to about $9,500 from your balance.
That reduction affects everything downstream. A lower balance means:
FTA should be the first relief program evaluated for any taxpayer with a clean prior history — before installment agreements, before OICs, before any other program. Reducing the balance first makes every other program more favorable.
Option 1: By phone
Call the toll-free number printed on your penalty notice and ask the representative to remove the penalty. You don't have to use the term "First-Time Abatement," though naming it can help. FTA can often be granted on the call.
Option 2: Written request
Send Form 843 (or a written statement) to the address in the Form 843 instructions, listing the tax year and the penalties you want removed. If you want to cite the policy, it's IRM 20.1.1.3.3.2.1.
Option 3: Through a tax professional
Tax professionals can request FTA through the Practitioner Priority Line, which is reserved for authorized tax professionals and is usually much faster than the public line.
FTA applies to one tax period, and the IRS applies it to the earliest period that qualifies. If you have penalties across multiple years, FTA covers one; reasonable cause abatement or other mechanisms are needed for additional years.
FTA does not cover:
One of the most consistent findings in tax resolution work is how often taxpayers have penalty balances that are fully abatable — and simply don't know to ask. The IRS doesn't send a notice saying "you may qualify for First-Time Penalty Abatement." They assess the penalty, send the balance notice, and wait.
Tax Titans' enrolled agents check FTA eligibility as a standard part of every case review. In many situations, FTA is the first thing we pursue — not because it's always available, but because when it is, it reduces the balance before any other program is applied, saving clients meaningful money.
If you have a penalty balance and a clean prior compliance history, call us before you do anything else. A 15-minute conversation may tell you that a significant portion of what you owe can simply be removed.
📞 Call (888) 684-4992 — Monday through Saturday.
📋 Answer a few quick questions here — we'll reach out as soon as possible.
Can I get FTA if I already set up a payment plan?
Yes — FTA can be requested even after an installment agreement is in place. If your payment plan was based on a higher balance that included penalties, abating those penalties may allow you to recalculate and lower your monthly payment.
What if the IRS denies my FTA request?
Denials are usually based on eligibility issues — a prior penalty in the three-year lookback period, or an unfiled return. Understanding why you were denied tells you whether an appeal is worth pursuing or whether a reasonable cause argument might apply instead.
Can I get FTA for payroll taxes (Form 941)?
Yes — FTA is available for payroll tax penalties as well as income tax penalties, subject to the same eligibility criteria.
Does FTA apply to state tax penalties?
No — FTA is an IRS program for federal taxes. State tax penalties are governed by each state's own policies, which vary significantly.
Tax Titans | (888) 684-4992 | info@taxtitansusa.com
This article is for informational purposes only and does not constitute legal or tax advice.
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