IRS Penalty Abatement:
How to Get Penalties Removed

Penalties Are Not Fixed. They're Contestable.

Most people who owe the IRS treat the balance on their notice as a fixed number. It isn't. A significant portion of most IRS balances — sometimes 30–40% — is penalties. And the IRS has formal programs to remove those penalties if you qualify and if you ask.

The critical word is ask. Penalties are never removed automatically. The IRS doesn't proactively review your compliance history and send you a credit. You — or a representative on your behalf — must submit a formal abatement request.

The Two Main Abatement Programs

First-Time Penalty Abatement (FTA)

First-Time Abatement is the IRS's administrative penalty relief program for taxpayers who have a clean compliance history. To qualify:

• You must have filed all required returns (or filed a valid extension) for the prior three years
• You must have paid, or arranged to pay, all taxes due for those three years
• You must not have had penalties assessed in the prior three years (other than estimated tax penalties)

FTA applies to Failure-to-File, Failure-to-Pay, and Failure-to-Deposit penalties. It's available for a single tax period — if you have penalties across multiple years, FTA applies to the first qualifying year. Reasonable Cause abatement (see below) applies to the remaining years.

FTA can be requested by phone with the IRS or in writing. Many tax professionals request it by phone during the same call where they're establishing a payment arrangement — reducing the balance before the agreement terms are set.

Reasonable Cause Abatement

Reasonable Cause abatement applies when you can demonstrate that you exercised ordinary business care and prudence but were still unable to comply due to circumstances beyond your control. The IRS evaluates these case by case.

Common qualifying circumstances include:

• Serious illness or hospitalization that prevented timely filing or payment
• Death of a spouse, parent, or other immediate family member
• Natural disaster or fire that destroyed records
• Reliance on erroneous written advice from the IRS itself
• Unavoidable absence (incarceration, medical facility)

The Accuracy-Related Penalty on CP2000 Notices

If you've received a CP2000 or CP3219A, the proposed balance may include an Accuracy-Related Penalty of 20% of the proposed underpayment. This penalty applies when the IRS determines you substantially understated your tax liability.

This penalty is separately contestable. If you had a reasonable basis for your filing position — even if the IRS ultimately disagrees — the penalty can be waived. "Reasonable basis" includes reliance on a tax professional's advice, a plausible interpretation of a tax rule, or adequate disclosure of the uncertain position on the return.

How to File the Request

Penalty abatement can be requested three ways:

• By phone — call the IRS at 800-829-1040 and request FTA directly. This works for straightforward FTA cases where you clearly qualify.
• In writing — send a letter to the IRS service center that processed your return, citing IRC Section 6651 (Failure-to-File/Pay) or 6656 (Failure-to-Deposit) and your basis for abatement. Include supporting documentation for Reasonable Cause claims.
• Form 843 — the formal Claim for Refund and Request for Abatement, used when the penalties have already been paid and you're seeking a refund of the penalty amount.

The IRS denies many abatement requests simply because they're incomplete, undocumented, or cite the wrong legal authority. A representative who knows what the IRS is looking for in an abatement request — and what to include in the supporting documentation — has a significantly higher success rate than a self-filed request.

Frequently Asked Questions