Charged a late penalty?

Before you pay a penalty, ask if the IRS will just erase it.

You filed late, or paid late, and the IRS tacked on a penalty. Here’s the part almost nobody uses: if your record is otherwise clean, the IRS has a one-time administrative waiver — First-Time Abatement — that wipes that penalty out, often with a single phone call and no explanation required. It’s free. Most people never ask, and just pay.

First-Time Abatement, in one breath

FTA is an administrative waiver, not a hardship program — you don’t have to prove you had a good reason. It erases a failure-to-file, failure-to-pay, or failure-to-deposit penalty for a single tax year when you have a clean compliance history. The penalties it removes are the expensive ones: the failure-to-file penalty is 5% of the unpaid tax per month (up to 25%, with a $525 minimum once a return is more than 60 days late), and the failure-to-pay penalty is 0.5% a month. A single clean-record phone call can wipe a full year of those.

IRS — First-Time Abate irs.gov· Failure to file irs.gov· Failure to pay irs.gov

Do you qualify? Three things have to be true.

“First time” is about a clean recent record, not whether you’ve ever been late. All three of these have to hold:

1 · Clean penalty history

For the three tax years before the one you got the penalty on, you had no penalties— other than the estimated-tax penalty, which doesn’t count against you. (If you did get one but it was later removed for reasonable cause or an IRS error, you’re still clean.)

2 · All required returns filed

You’ve filed all the returns you’re currently required to file (or have a valid extension on file). The same return type has to have been filed on time for the prior three years.

3 · Paid up, or on a plan

Any tax you owe is paid, or you’re on a payment plan that’s in good standing. You don’t have to have zeroed the balance — being in an installment agreement counts as current.

IRS — Penalty relief due to First-Time Abate irs.gov

How to actually ask — it’s a five-minute move

Two ways, and neither requires you to write an essay. Call the toll-free number in the top-right corner of the notice and ask for First-Time Abatement, or send a written statement or Form 843 (the IRS form for requesting an abatement of penalties, interest, and certain taxes). The IRS says it plainly: you don’t need to specify FTA as the relief sought or provide supporting documents— for a clean record, it can be one phone call with nothing to prove.

IRS — First-Time Abate (how to request) irs.gov · About Form 843 irs.gov

Don’t qualify for FTA? Reasonable cause is the fallback.

If your record isn’t clean enough for the automatic waiver, the IRS can still remove a penalty for reasonable cause— when something outside your control stopped you from filing or paying. It’s decided case by case, and here you do tell the story. Reasons the IRS recognizes include a fire, natural disaster, or civil disturbance; a death, serious illness, or unavoidable absence of you or an immediate family member; and being unable to get your records.

What a reasonable-cause request needs

Write up what happened, when it happened, and how it stopped you from complying— plus what you did to try to get right once you could. Back it with documentation: medical records with dates, disaster records, copies of correspondence. The clearer the timeline, the better the odds.

IRS — Penalty relief for reasonable cause irs.gov

Know what you’re erasing: penalty, tax, and interest are three things

On your notice these are separate lines, and abatement only touches one of them. The penalty is what FTA or reasonable cause removes — but abating the penalty does not erase the tax you actually owed; that still has to be paid (or put on a plan). And interest is its own line: the IRS automatically reduces or removes the interest tied to a penalty when it reduces or removes that penalty— so interest on the penalty comes off only to the extent the penalty does. Interest on the underlying tax generally can’t be abated at all, unless it was caused by an IRS error or delay.

IRS — Penalties overview irs.gov · Reasonable cause & related interest irs.gov

Not sure which penalty you were charged?

Two places tell you exactly what you owe and why. The IRS notice that arrived in the mail names the penalty and the year. And your free account transcript— pulled online through the IRS “Get transcript” tool — lists every penalty by code and amount, so you can see the failure-to-file or failure-to-pay charge you’re asking to remove.

IRS — Get transcript irs.gov · Penalties irs.gov

The move

Before you pay a penalty, ask: “Do I qualify for First-Time Abatement?”

For a filer with an otherwise clean record, it’s often a free five-minute fix— one call to the number on the notice, nothing to prove. If you don’t qualify, reasonable cause is the fallback. And you don’t have to make the call alone: a free VITA or Low Income Taxpayer Clinic volunteer can make the request with you.

IRS — First-Time Abate irs.gov· Low Income Taxpayer Clinics irs.gov

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