IRS first time penalty abatement (FTA) is administrative relief granted by the IRS to waive a tax penalty that would otherwise be assessed. If you qualify for IRS penalty abatement, you can request relief from specific penalties.
Keep in mind the IRS has an established monetary limit regarding the number of penalties FTA can remove.
Here are the basics of what you need to know about IRS first time penalty abatement.
Which IRS Penalties Does First Time Penalty Abatement Provide Relief From?
If you meet the specified IRS penalty abatement criteria, the IRS may grant first time penalty abatement to relieve you from failure-to-file penalties (FTF), failure-to-pay penalties (FTP), and failure-to-deposit penalties (FTD).
However, IRS penalty abatement does not apply to some penalties, such as accuracy-related penalties.
Do I Qualify for IRS First Time Penalty Abatement?
There are three essential criteria that you must meet to be eligible for IRS penalty abatement:
- You were not assessed penalties in the last three tax years.
- You filed all required tax returns or extensions before requesting first time penalty abatement. Taxpayers who have not filed will not qualify.
- You pay or make payment arrangements (like an installment agreement) for past due taxes before applying for IRS penalty abatement.
What Is IRS First Time Penalty Abatement Due to Reasonable Cause?
Several scenarios constitute reasonable cause for IRS first time penalty abatement.
Some of these reasons include:
- An IRS representative gave you bad advice
- You were given incorrect info from a tax professional
- Your records were destroyed by a natural disaster such as flood or fire
- You were not able to calculate the tax due amount because of a lack of records
- You could not make the payment because of a civil disturbance
- A close family member died
How Do I Request IRS First Time Penalty Abatement?
You can apply for IRS first time penalty abatement by filing Form 843 with the IRS. If you are eligible, the IRS has the authority remove tax penalties right away.
However, in some situations, the IRS agrees to remove penalties after penalty abatement only when you have paid your back taxes in full.
What Is the IRS First Time Penalty Abatement Form?
You use IRS Form 843 to request IRS first time penalty abatement. You will indicate the tax period, type of tax or fee, type of penalty, and reason for the abatement request.
The IRS decision regarding your penalty abatement request usually takes about three to four months to process after you submit Form 843.
Where Do I Send an IRS First Time Penalty Abatement Request?
The following are the common locations to mail your IRS first time penalty abatement request:
- If you are filing Form 843 in response to a specific IRS notice, send your 843 to the IRS address printed in your notice.
- If you are filing Form 843 because of penalties, or reasons unrelated to an IRS notice, send your 843 form to the IRS center where you mail your tax return.
For other scenarios or to view the IRS current information for Where to File Form 843, visit: https://www.irs.gov/filing/where-to-file-for-form-843.
What Is the IRS Phone Number for the First Time Penalty Abatement Program?
Call the IRS phone number on your IRS notice for information about IRS first time penalty abatement or other administrative waivers.
IRS First Time Penalty Abatement Wrap Up
All first year failure-to-file (FTF) and failure-to-pay (FTP) penalties are allowed to use IRS first time penalty abatement regardless of whether a taxpayer is eligible for reasonable cause IRS penalty abatement.
If you are eligible, mail Form 843 to the IRS and request first time penalty abatement of any FTP or FTF penalty eligible for FTA.
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