IRS Abating Penalties: How Taxpayers Can Request Relief From IRS Penalties  

The Difference Between First-Time Penalty Abatement and Reasonable Cause  

The IRS offers several pathways for penalty relief, but the two most common are First-Time Penalty Abatement (FTA) and Reasonable Cause Penalty Abatement.

Understanding the difference between these options is key when requesting IRS penalty relief.

First-Time Penalty Abatement (FTA)  

First-Time Penalty Abatement is a one-time administrative waiver available to taxpayers who have demonstrated a history of compliance.

To qualify for FTA, taxpayers generally must:

• Have filed all required tax returns
• Have paid or arranged to pay any tax owed
• Have had no significant penalties in the previous three years

If these criteria are met, the IRS may remove certain penalties—including failure-to-file and failure-to-pay penalties—for a single tax year.

The advantage of First-Time Penalty Abatement is that taxpayers do not need to prove hardship or extraordinary circumstances. Eligibility is based primarily on past compliance.

However, because FTA can only be used once within a specific timeframe, taxpayers should carefully consider when to request it.

Reasonable Cause Penalty Abatement  

Reasonable Cause penalty relief is available when taxpayers can show that circumstances beyond their control prevented them from meeting tax obligations.

Unlike First-Time Penalty Abatement, reasonable cause requires evidence and documentation.

The IRS evaluates whether the taxpayer exercised ordinary business care and prudence but was still unable to comply due to legitimate circumstances.

If the IRS determines that reasonable cause exists, penalties may be reduced or removed.

Common Situations Where the IRS May Approve Penalty Relief  

The IRS provides guidance on situations that may qualify for reasonable cause penalty abatement. While approval is never guaranteed, certain circumstances are more likely to be considered valid.

Serious Illness or Medical Emergencies  

If a taxpayer or an immediate family member experienced a serious illness that prevented timely filing or payment, the IRS may consider penalty relief.

Medical records or documentation from healthcare providers may be required.

Natural Disasters  

Events such as hurricanes, floods, wildfires, or other natural disasters can disrupt a taxpayer’s ability to file returns or make payments.

In some cases, the IRS automatically provides relief for taxpayers located in federally declared disaster areas.

Death in the Family  

The death of a close family member can understandably disrupt financial and administrative responsibilities. The IRS may grant relief when such circumstances interfere with tax compliance.

Records Destroyed or Unavailable  

When critical financial records are lost due to theft, fire, or other unforeseen events, taxpayers may struggle to prepare accurate returns on time.

The IRS may consider these situations when evaluating reasonable cause.

Reliance on Incorrect Professional Advice  

In certain cases, taxpayers may qualify for penalty relief if they relied on the advice of a qualified tax professional and that advice turned out to be incorrect.

However, the IRS generally expects taxpayers to exercise reasonable judgment, so documentation is essential.

How to Request Penalty Abatement From the IRS  

Taxpayers seeking IRS abating penalties must formally request relief through the appropriate channels.

Several methods may be used depending on the circumstances.

Request by Phone  

In some cases, particularly for First-Time Penalty Abatement, taxpayers or their representatives may request penalty relief by calling the IRS.

This approach may work when eligibility is straightforward and documentation is not required.

Written Request  

For reasonable cause requests, a written explanation is typically necessary.

This explanation should include:

• A clear description of the circumstances that prevented compliance
• The dates and timeline of events
• Documentation supporting the claim
• Steps taken to correct the issue

A well-prepared written request can significantly improve the likelihood of success.

Filing IRS Form 843  

Taxpayers may also request penalty abatement using Form 843 (Claim for Refund and Request for Abatement).

This form allows taxpayers to explain the reason for their request and attach supporting evidence.

Mistakes Taxpayers Make When Requesting Penalty Relief  

Although the IRS does allow penalty relief in certain situations, many requests are denied due to common mistakes.

Understanding these pitfalls can help taxpayers avoid unnecessary rejection.

Submitting Vague Explanations  

One of the most common errors is providing an explanation that lacks specific details.

Statements such as “I forgot” or “I was busy” are unlikely to persuade the IRS.

Requests should include clear facts, timelines, and documentation.

Failing to File Required Returns  

The IRS generally requires taxpayers to be fully compliant with filing obligations before considering penalty relief.

If returns are missing, the IRS may deny the request outright.

Waiting Too Long to Request Relief  

Delaying a penalty abatement request can reduce the chances of approval.

In some situations, taxpayers may miss important deadlines or lose opportunities to resolve the issue earlier.

Not Understanding Which Relief Option Applies  

Some taxpayers request reasonable cause relief when they would actually qualify for First-Time Penalty Abatement—or vice versa.

Choosing the correct strategy is critical.

Why Professional Guidance Can Improve the Chances of Success  

Although some taxpayers attempt to request penalty relief on their own, the process can be more complex than it appears.

An experienced tax professional understands how the IRS evaluates penalty abatement requests and can help structure the request effectively.

Professional assistance may include:

• Reviewing IRS account transcripts
• Identifying the most appropriate penalty relief strategy
• Preparing detailed documentation and explanations
• Communicating directly with the IRS on the taxpayer’s behalf
• Ensuring compliance with filing and payment requirements

Because every tax situation is different, a careful review of the taxpayer’s financial and compliance history is often necessary before submitting a request.

How Twenty20 Financial Can Help 

IRS penalties can quickly increase the total amount you owe, making an already stressful tax situation feel even more overwhelming. In many cases, however, taxpayers may qualify for IRS abating penalties through programs such as First-Time Penalty Abatement or reasonable cause relief. Successfully requesting the IRS to waive penalty charges often requires proper documentation, a clear explanation of the circumstances, and a strategic understanding of how the IRS evaluates these requests.

At Twenty20 Financial, we help individuals and business owners navigate complex IRS issues with clarity and confidence. Our team reviews your IRS account history, determines whether penalty relief may be available, and prepares a structured request designed to give you the strongest possible chance of success. We also communicate directly with the IRS on your behalf, ensuring that the process is handled accurately and efficiently.

If you’re dealing with IRS penalties, notices, or growing tax balances, you don’t have to face it alone. The right strategy can reduce unnecessary penalties and put you back on a clear path toward compliance.

Contact Twenty20 Financial today for a confidential consultation and learn how we can help you resolve IRS penalties and move forward with confidence.

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