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20 March 2018

The IRS Offers a First-Time Penalty Abatement Waiver

The IRS Offers a First-Time Penalty Abatement Waiver
Who says the IRS isn’t forgiving? The agency hands out penalties quite liberally for late filing, overdue payments, and missing deposits, but did you know taxpayers facing their first penalty in at least three years may be able to have it forgiven? The policy is called First Time Penalty Abatement and, although it’s not well known, it’s been an option since 2001.


Any taxpayer can ask for the abatement so, if you’re handed a penalty, it’s often in your best interest to try. The IRS makes the judgment call on a case-by-case basis. They’ll want to see that your recent tax history is in good order, which includes having filed your taxes (or appropriate extensions) and having paid or having arranged to pay any previous debts.

Work with a tax professional, though, to help you navigate the waters. The IRS admits that the failure-to-pay penalty continues to accrue until the tax is paid, so it recommends paying in full before requesting penalty relief. The agency also mentions that if you’ve received incorrect oral advice from the IRS, you may qualify for separate administrative relief. And, if you’re denied abatement, there are ways to appeal the decision. Given these factors, it’s important to have help on your side to best determine whether you qualify for abatement, additional relief, or a tax reduction due to an error. Feel free to contact us with your questions.

Image Copyright: tnn103eda / 123RF Stock Photo

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