What is First Time Penalty Abatement And How Do I Qualify?

What is First Time Penalty Abatement And How Do I Qualify?

If you have filed a tax return late and/or with a balance, you may qualify for the IRS First Time Penalty Abatement.

Here is how it works:
  • The taxpayer must be in filing compliance. In other words, all tax returns must be filed.
  • You must have had year “3 clean prior years” with no balances. For example, if you are seeking a Penalty Abatement for the 2016 tax year, you cannot have a balance for the tax years 2013, 2014 and 2015 and those years must not have been assessed a penalty. If you owe taxes for any year after 2016, you may still qualify to have the 2016 penalty abated.
  • You must be on an Installment Agreement for the outstanding balance.

It is usually nothing more than calling the IRS and requesting the First Time Penalty Abatement. You can usually accomplish this on your lunch break. It’s that simple.


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