Penalty Abatement / First-Time Abate (FTA)

IRS penalties can quickly add up and make tax problems worse. Fortunately, the IRS offers Penalty Abatement programs to reduce or remove penalties in qualifying situations. One of the most common is the First-Time Abate (FTA) program, which can provide relief if you have a clean compliance history.

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What is Penalty Abatement?

Penalty abatement is the IRS’s way of forgiving penalties for failure to file, failure to pay, or other compliance issues under certain conditions. It can save you thousands of dollars in penalties and interest.

First-Time Abate (FTA) Program

The FTA program is a one-time waiver of penalties for taxpayers who have a history of compliance but made a mistake in the most recent tax year. To qualify:

• You must have filed all required returns and paid any tax due (or arranged to pay).
• You must not have had penalties in the prior three years.
• The penalty must be for failure to file, pay, or deposit on time.

How to Request Penalty Abatement

You can request penalty abatement by:

• Calling the IRS directly and asking for FTA relief.
• Submitting a written request with reasonable cause documentation.
• Working with a tax professional to handle the request and documentation.

When Penalty Abatement May Not Apply

If you have a history of non-compliance or repeated penalties, FTA may not be available. Other penalty relief options may apply, such as reasonable cause abatement or Offer in Compromise.

Allen Lenth, EA, MBA
IRS Tax Resolution Specialist