F is for First Time Penalty Abatement

  • The first time penalty abatement (FTA) waiver is an administrative waiver that the IRS may grant to relieve taxpayers from failure-to-file, failure-to-pay and failure-to-deposit penalties if certain criteria are met.
  • The IRS also removes interest related to those penalties.

First Time Penalty Abatement is an option that may be available to taxpayers to remove IRS penalties that have been assessed to a tax debt. However, not everyone qualifies for penalty abatement. Also, not all penalties are eligible for penalty abatement. Some of the most common penalties that are able to be abated are failure to file, failure to pay, and failure to deposit estimated tax.

You may qualify for administrative relief from penalties for failing to file a tax return, pay on time, and/or to deposit taxes when due under the IRS First Time Penalty Abatement policy if you meet the following:
  • A taxpayer didn’t previously have to file a return, or you have no penalties for the 3 tax years prior to the tax year in which you received a penalty.
  • You filed all currently required returns or filed an extension of time to file.
  • You have paid, or arranged to pay, any tax due.

The failure-to-pay penalty will continue to accrue, until the tax is paid in full. It may be to your advantage to wait until you fully pay the tax due prior to requesting penalty relief under the Service’s first-time penalty abatement policy. The penalty is 5% of your balance per month.

Interest charged on a penalty will be reduced or removed when that penalty is reduced or removed. If an unpaid balance remains on your account, interest will continue to accrue until the account is full paid.

Other administrative relief: If you received incorrect oral advice from the IRS, you may qualify for administrative relief.

Determining whether a situation or event qualifies a taxpayer for penalty relief can be tricky. Seeking professional help from an Enrolled Agent and Certified Tax Resolution Specialist is helpful not only because the tax professional is familiar with the qualifications for penalty abatement, but also, they will know how to properly organize and submit your request.  Discover how to solve your tax problem by speaking with us today.  Find out more about me. Book your appointment today at https://meetme.so/SFSTax or call 877.355.8010.