First Time Penalty Abatement With the IRS

Published by Doug Chaffins at March 14, 2017

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First Time IRS Penalty Abatement Tax Season

If you’ve received a letter from the IRS notifying you that a penalty has been assessed to your individual or business account, the situation may not be as bad as it seems. That’s because in some cases, the IRS will remove the penalty – but only if asked to do so.

This first time penalty abatement – or waiver – isn’t very well publicized, but your certified public accountant can apply for this relief on your behalf. If the request is erroneously declined, your CPA can also appeal the decision.

This IRS penalty waiver can apply in some cases of failure-to-file, failure-to-pay, or failure-to deposit penalties. It doesn’t apply to every type of penalty, however.

Conditions you’ll have to meet

In order to qualify for a first time penalty abatement, you’ll need to meet the following conditions:

  • You’ve filed all required returns – or filed a valid extension for them. You also can’t have an outstanding IRS request for a return.
  • You’ve paid or reached an agreement with the IRS to pay your taxes that are owed.
  • You haven’t received an IRS penalty in three years. If you’ve had one longer ago than three years ago, the IRS considers the new penalty as first time.

In some cases, you may have a reasonable cause (including a fire, natural disaster, serious illness, etc.) that caused the problem with your taxes, and if this is the case, your CPA can apply for a waiver for this reason. Even if you qualify for a first time IRS penalty abatement, if you have reasonable cause, you may want to exercise this option instead. That’s because it will allow you to “save” your first time penalty abatement in case you need to use it in the future.

If you need help

For more information about first time IRS penalty abatement, contact Atlanta-based certified public accountants Fricke & Associates, P.C.  We have years of experience in dealing with taxing authorities and will help you achieve the best possible outcome.


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