How to Get IRS Penalties Removed: A Complete Guide to Penalty Abatement

Key Takeaways

• The IRS offers three main types of penalty relief: First Time Abate (FTA), reasonable cause, and statutory exception
• First Time Abate requires a clean compliance history for the prior 3 tax years with no penalties
• You can request penalty relief by phone, in writing, or by filing Form 843
• Starting in 2026, the IRS will automatically apply First Time Abatement for eligible taxpayers
• Interest on penalties is automatically reduced when penalties are removed

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Receiving an IRS notice with penalty charges can feel overwhelming, but you may have options to reduce or eliminate those penalties entirely. The IRS removes millions of dollars in penalties each year for taxpayers who qualify for relief. This comprehensive guide explains the three types of penalty relief available, eligibility requirements, and exactly how to request abatement.

Understanding IRS Penalties

Before seeking relief, it helps to understand which penalties you're facing. The most common IRS penalties eligible for abatement include:

According to the IRS, penalties are designed to encourage voluntary compliance with tax laws [1]. However, the tax code also provides mechanisms for relief when circumstances warrant it.

Three Types of Penalty Relief

1. First Time Abate (FTA)

First Time Abate is the most common administrative waiver and often the easiest path to penalty relief. The IRS grants FTA to taxpayers with a history of good compliance who made a one-time mistake.

Eligibility Requirements for First Time Abate:

To qualify for FTA, you must meet all of the following criteria:

1. Filed the same return type for the past 3 tax years before the penalty year
2. No penalties during those prior 3 years (or any penalty was removed for an acceptable reason other than FTA)
3. Filed all required returns or have a valid extension on file
4. Paid or arranged to pay any tax due

The IRS will review your account automatically when you request relief. You don't need to provide documentation or specify "First Time Abate" in your request—the IRS will check if you qualify [2].

Important Update for 2026: The IRS announced that starting in 2026, First Time Abatement will be applied automatically for eligible taxpayers, eliminating the need to request it [3].

2. Reasonable Cause Relief

If you don't qualify for First Time Abate, you may still obtain relief by demonstrating reasonable cause. This requires showing that you exercised ordinary business care and prudence but still couldn't comply with your tax obligations.

Circumstances That May Qualify as Reasonable Cause:

• Death, serious illness, or unavoidable absence of the taxpayer or immediate family member
• Fire, casualty, natural disaster, or other disturbance affecting your records
• Inability to obtain necessary records despite reasonable efforts
• Erroneous advice from the IRS (oral or written)
• Reliance on a qualified tax professional who made an error
• Ignorance of the law when combined with other factors

The IRS evaluates reasonable cause requests based on all facts and circumstances of your situation [4]. Documentation supporting your claim significantly strengthens your request.

3. Statutory Exception

Certain penalties have specific exceptions written into the tax code. For example, the estimated tax penalty may be reduced or eliminated if:

• Your prior year tax liability was zero
• You retired or became disabled during the tax year
• Your income was received unevenly throughout the year

How to Request Penalty Abatement

You have three options for requesting penalty relief:

Option 1: Call the IRS

The fastest method is calling the IRS at the toll-free number on your notice. Have the following ready:

• Your notice or letter
• The specific penalty you want relieved
• Your reasons for requesting relief

Many penalty relief requests can be approved during the call. The IRS representative will review your account and inform you of the decision immediately [5].

Option 2: Send a Written Request

Mail a letter to the IRS address on your notice explaining:

• Your name, address, and Social Security number or EIN
• The tax year and type of penalty
• The specific relief you're requesting
• Your reasons for the request
• Supporting documentation (for reasonable cause claims)

Option 3: File Form 843

Form 843, Claim for Refund and Request for Abatement, is the official IRS form for penalty relief requests [6]. Use this form when:

• You've already paid the penalty and want a refund
• Your written request was denied and you want to appeal
• You need a formal record of your request

What Happens to Interest?

When the IRS removes or reduces a penalty, the related interest is automatically adjusted as well. You don't need to file a separate request for interest relief [7].

However, interest continues to accrue on any unpaid tax balance until it's paid in full. Penalty relief only affects the penalty portion—not the underlying tax debt.

If Your Request Is Denied

If the IRS denies your penalty relief request, you have the right to appeal. Your denial letter will include instructions for the appeals process. Generally, you can:

1. Request a conference with an IRS Appeals officer
2. File a formal written protest
3. Seek relief through the U.S. Tax Court (for certain penalties)

The appeals process is independent of the IRS examination function, giving you a fresh review of your case [8].

Tips for a Successful Penalty Abatement Request

Based on IRS procedures and practitioner experience, these strategies improve your chances of success:

Do:

• Respond promptly to IRS notices
• Be specific about which penalties you're requesting relief for
• Provide documentation supporting reasonable cause claims
• Maintain a professional, factual tone
• Follow up if you don't receive a response within 60 days

Don't:

• Ignore IRS notices hoping penalties will go away
• Make false statements or exaggerate circumstances
• Assume you don't qualify without checking
• Wait until the last minute to request relief

When to Seek Professional Help

While many taxpayers successfully request penalty abatement on their own, consider professional assistance if:

• You owe more than $10,000 in penalties
• Your situation involves complex reasonable cause arguments
• You've been denied relief and want to appeal
• You're facing multiple penalties across several tax years
• The IRS has initiated collection actions

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Frequently Asked Questions

Q: Can I get penalty relief if I still owe taxes? A: Yes. You can request First Time Abate even if you haven't fully paid your tax balance. However, failure-to-pay penalties will continue to accrue until the tax is paid [9].

Q: How long does penalty abatement take? A: Phone requests may be resolved immediately. Written requests typically take 30-60 days for a response.

Q: Can I request penalty relief for multiple years? A: Yes, but First Time Abate can only be used once every three years. You may need to use reasonable cause for additional years.

Q: What if I used a tax preparer who made a mistake? A: Reliance on a qualified tax professional can support a reasonable cause claim, but you must show you provided accurate information and had no reason to doubt their advice.

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References

[1] IRS. "Penalties." https://www.irs.gov/payments/penalties

[2] IRS. "Administrative Penalty Relief." https://www.irs.gov/payments/administrative-penalty-relief

[3] National Association of Tax Professionals. "IRS First-Time Penalty Abatement Automatic in 2026." https://www.natptax.com/news-insights/blog/irs-first-time-penalty-abatement-automatic-in-2026/

[4] IRS. "Penalty Relief for Reasonable Cause." https://www.irs.gov/payments/penalty-relief-for-reasonable-cause

[5] IRS. "Penalty Relief." https://www.irs.gov/payments/penalty-relief

[6] IRS. "About Form 843, Claim for Refund and Request for Abatement." https://www.irs.gov/forms-pubs/about-form-843

[7] IRS. "Interest." https://www.irs.gov/payments/interest

[8] IRS. "Penalty Appeal." https://www.irs.gov/appeals/penalty-appeal

[9] IRS Internal Revenue Manual 20.1.1, "Introduction and Penalty Relief." https://www.irs.gov/irm/part20/irm_20-001-001r

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This article is for informational purposes only and does not constitute legal or tax advice. Tax laws are complex and subject to change. Consult a qualified tax professional or attorney for advice specific to your situation. IRS Tax Answers is not a law firm and does not provide legal representation.

Last Updated: January 2026