If the IRS has hit you with a penalty for filing or paying late, you may be able to get it wiped out entirely through first time penalty abatement — and most eligible taxpayers never even ask. This one-time relief can erase failure-to-file, failure-to-pay, and failure-to-deposit penalties for people with an otherwise clean record.
First-time penalty abatement (also called First Time Abate) is an IRS administrative waiver that removes certain penalties if you have a clean compliance history for the prior three years, you’ve filed all required returns, and you’ve paid or arranged to pay any tax due. You can request it by phone, in writing, or with Form 843.
What is first-time penalty abatement?
First-time penalty abatement (FTA) is a relief option the IRS offers to taxpayers who normally meet their obligations but slipped up once. Rather than forcing you to prove a hardship or “reasonable cause,” the IRS grants this waiver based purely on your prior good behavior.
It’s been available for years, yet the IRS itself has acknowledged that many qualifying taxpayers never request it. That gap costs people real money — penalties can add up depending on how much tax was owed and how long it went unpaid.
Because FTA is an administrative waiver and not a discretionary favor, the IRS will generally grant it automatically once it confirms you meet the criteria. The challenge is knowing the relief exists and asking for it the right way. You can review the rules on the IRS first-time penalty abatement page.
Which penalties does First Time Abate cover?
FTA applies to three specific penalty types. It does not cover every penalty the IRS can assess, so it’s important to identify what’s actually on your notice.
- Failure to File (FTF): Charged when you don’t file a return — including individual, partnership, or S corporation returns — by the due date, including extensions.
- Failure to Pay (FTP): Charged when you don’t pay the tax reported on your return, or tax the IRS determines you owe, by the deadline.
- Failure to Deposit (FTD): Charged to businesses that don’t deposit employment taxes correctly, on time, or in the right way.
Penalties like the accuracy-related penalty, fraud penalties, or the estimated tax penalty are generally not eligible for FTA. If your notice lists one of those, you’ll likely need a different relief route, such as reasonable cause. Staying on top of your filings through good tax planning is the best way to keep this relief available as a safety net.
How to qualify for first-time penalty abatement
The IRS looks at three core conditions. You generally need to satisfy all of them.
| Requirement | What it means |
|---|---|
| Clean compliance history | You filed the same type of return (if required) for the three tax years before the penalty year and had no penalties — or any penalties were removed for a reason other than FTA. |
| Filing compliance | You’ve filed all currently required returns, or you’ve filed a valid extension for any return not yet due. |
| Payment compliance | You’ve paid, or arranged to pay, any tax you owe. An active installment agreement that you’re keeping up with can satisfy this. |
The “three clean years” rule is the part people get tripped up on. A reminder notice that didn’t result in an actual penalty won’t disqualify you. And if a penalty in a prior year was already removed for reasonable cause, it usually won’t count against you here.
What if you can’t pay the full balance?
You don’t have to clear your entire tax bill before requesting FTA — you only need to have paid it or be in an approved arrangement. Setting up an IRS payment plan can keep you “in compliance” while you resolve the balance, so you can still qualify for the waiver.
How to request first-time penalty abatement: step by step
- Read your IRS notice carefully. Identify the exact penalty type, the tax year, and the dollar amount. The notice number is usually in the top or bottom right corner.
- Confirm you meet the three conditions. Check that your prior three years are clean and that your filing and payment obligations are current.
- Choose your request method. You can call the toll-free number printed on the notice, send a written statement, or file Form 843 (Claim for Refund and Request for Abatement).
- Ask specifically for First Time Abate. When you call, state that you’re requesting first-time penalty abatement. The representative can often review your account and apply it during the call.
- Get confirmation in writing. If relief is granted by phone, ask the IRS to send written confirmation, or follow up with a letter documenting the conversation.
- Watch your account. Verify the penalty (and any related interest on that penalty) is removed on a later statement or in your online account.
One practical tip: phone requests are frequently the fastest route for a single penalty year, while Form 843 creates a clear paper trail and is often better when you’re also seeking a refund of a penalty you already paid.
FTA vs. reasonable cause: which should you use?
If you don’t qualify for FTA — say, because you had a penalty in one of the prior three years — you may still get relief through reasonable cause. The two are different tools.
| Factor | First Time Abate | Reasonable cause |
|---|---|---|
| Basis for relief | Clean prior compliance history | Circumstances beyond your control |
| Documentation needed | Usually none — IRS checks your record | Evidence (medical records, disaster proof, etc.) |
| How often available | Generally one period per taxpayer | Case by case, no fixed limit |
| Typical examples | A one-off late filing or payment | Serious illness, natural disaster, records destroyed |
A smart strategy many tax professionals use: if you qualify for both, it can be worth requesting reasonable cause first and saving your one-time FTA for a future year — since FTA is essentially a “free pass” you only get once. The right choice depends on your specific history.
Common mistakes that get FTA requests denied
- Requesting it for an ineligible penalty such as an accuracy-related penalty.
- Having an unfiled return still outstanding — you must be filing-compliant first.
- Assuming a prior reminder notice was a penalty and giving up too early.
- Not following up after a verbal approval, leaving no record of the decision.
- Forgetting interest. FTA removes the penalty, but interest charged on the underlying tax generally isn’t waived — only interest tied to the abated penalty is reduced.
If you’ve received a notice and aren’t sure how to respond, the official penalty relief pages on IRS.gov are the most reliable starting point. Keeping clean records of your income and your business deductions throughout the year also makes any request far easier to support.
Frequently asked questions
Does first-time penalty abatement remove interest too?
Not entirely. FTA removes the eligible penalty itself, and the IRS will reduce the interest that accrued on that specific penalty. However, interest on the underlying unpaid tax generally remains. Pay the tax balance as quickly as possible to stop additional interest from building up.
Can I get FTA if I’m on a payment plan?
Yes. Being in an approved installment agreement and current on your payments generally satisfies the “payment compliance” requirement. You don’t have to pay the full balance up front to qualify for first-time penalty abatement, as long as the tax is being addressed through an arrangement.
How many times can I use first-time penalty abatement?
FTA is generally available once per taxpayer for a single tax period. That’s why it’s worth using strategically. If you qualify for reasonable-cause relief instead in a given year, consider using that and reserving your one-time FTA for a future situation.
Will requesting FTA trigger an audit?
No. Requesting first-time penalty abatement is a routine administrative process and is not an audit trigger. The IRS simply reviews your compliance history to confirm eligibility. It’s a standard relief mechanism the agency expects taxpayers to use.
How long does it take to get a decision?
Phone requests for a single penalty are often resolved during the call. Written requests and Form 843 submissions can take several weeks or longer to process. Timeframes change, so check current processing guidance and your account status on IRS.gov for the latest information.
Book a free consultation
Penalty notices are stressful, but they’re often more fixable than they look. If you’re not sure whether you qualify for first-time penalty abatement — or which relief option will save you the most over time — Tranzesta’s tax professionals serve US and UK clients, review your account, confirm your eligibility, and handle the request for you. Book a free consultation and let’s get that penalty removed.
Disclaimer: This article is for general informational purposes only and does not constitute tax, legal, or accounting advice. Tax rules and figures change and depend on your situation and tax year. Always verify current IRS figures and consult a qualified tax professional before acting.
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