IRS Penalty Abatement
Remove or reduce IRS penalties including failure-to-file, failure-to-pay, and accuracy-related penalties. Our enrolled agents use first-time abatement, reasonable cause arguments, and administrative waivers to get results.
What Is IRS Penalty Abatement?
IRS penalty abatement is the process of requesting the IRS to remove or reduce penalties on your tax account. The IRS assesses penalties for a variety of reasons, and in many cases, those penalties can be reduced or eliminated through proper procedures.
Common IRS penalties include the failure-to-file penalty (5% per month up to 25%), failure-to-pay penalty (0.5% per month up to 25%), and accuracy-related penalty (20% of the underpayment). These penalties add up quickly and can significantly increase your total tax debt.
The IRS First-Time Abatement (FTA) program can remove penalties for a single tax period with no questions asked if you have a clean compliance history.
Types of Penalties We Can Help With
We handle all major IRS penalty types for individuals and businesses.
Failure-to-File Penalty
5% per month up to 25% of unpaid tax. Often eligible for first-time abatement or reasonable cause relief.
Failure-to-Pay Penalty
0.5% per month up to 25%. Can often be reduced when combined with an installment agreement.
Accuracy-Related Penalty
20% of the underpayment due to negligence or substantial understatement. Requires reasonable cause or adequate disclosure.
Failure-to-Deposit Penalty
2-15% of the late deposit amount for payroll taxes. Available for first-time abatement for qualifying employers.
Information Return Penalties
Penalties for late or incorrect Forms 1099, W-2, and other information returns. Reasonable cause relief may apply.
International Penalties
Form 5472 ($25,000), FBAR, and other international information return penalties require specialized strategies.
Our Penalty Abatement Process
Proven approach to removing or reducing IRS penalties.
Penalty Analysis
We review your IRS account transcripts to identify all assessable penalties and determine which abatement strategies apply.
Strategy Selection
We determine the best approach: First-Time Abatement, reasonable cause, statutory exception, or administrative waiver.
Documentation
We help you gather supporting documentation for your abatement request, whether medical records, financial statements, or other evidence.
Submission
We prepare and submit your penalty abatement request with a persuasive legal argument supporting your case.
Follow-Up
We monitor the IRS response, provide additional information as needed, and appeal if the abatement is denied.
Related Services
Other IRS resolution services you may need.
Penalty Abatement FAQ
What is IRS penalty abatement?
Penalty abatement is the process of requesting the IRS to remove or reduce penalties assessed on your tax account. Common penalties include failure-to-file, failure-to-pay, accuracy-related, and late deposit penalties.
What is the IRS First-Time Penalty Abatement policy?
The First-Time Abatement (FTA) policy allows the IRS to remove penalties for a single tax period if you have a clean compliance history for the preceding 3 years. FTA is available for failure-to-file, failure-to-pay, and failure-to-deposit penalties.
What qualifies as reasonable cause for penalty abatement?
Reasonable cause includes circumstances beyond your control such as serious illness, death in the family, natural disasters, inability to obtain records, or reliance on incorrect professional advice. Documentation is required.
Can IRS penalties be removed due to COVID-19?
The IRS has granted penalty relief for certain COVID-19 related situations. We can help determine if your circumstances qualify for pandemic-related penalty relief.
How long does the penalty abatement process take?
Simple first-time abatement requests may be processed in 30-60 days. More complex reasonable cause requests can take several months, especially if additional documentation is required.
Can IRS penalties be removed if I already paid them?
Yes. If you paid penalties that could have been abated, you can file a claim for refund using Form 843. Generally, refund claims must be filed within 2-3 years of payment.
Stop Paying IRS Penalties
Find Out If You Qualify for Relief.
Schedule a consultation to review your IRS penalties and explore abatement options.
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