Question 1

What is First-Time Abatement (FTA)?

Accepted Answer

FTA removes certain penalties if you have a clean compliance history for the past 3 years (no penalties, filed timely, paid taxes). Available for failure-to-file and failure-to-pay penalties. Often granted automatically upon request.

Question 2

What qualifies as reasonable cause for penalty abatement?

Accepted Answer

Reasonable cause includes: death of family member, serious illness, natural disaster, inability to obtain records despite reasonable efforts, or other circumstances beyond your control. Requires thorough documentation.

Question 3

Can fraud penalties be abated?

Accepted Answer

Fraud penalties (75%) are extremely difficult to abate. Requires proving no fraudulent intent existed. Success rate very low. Tax attorney consultation essential.

Question 4

What is the appeal process for penalty abatement?

Accepted Answer

First request FTA or reasonable cause with IRS. If denied, file written protest to Appeals Office within 30 days. Appeals can negotiate settlement. For larger disputes, Tax Court petition within 90 days of SNOD.

Option	Eligibility	Success Rate	Amount Saved
First-Time Abatement (FTA)	Not Eligible	0%	$0
Reasonable Cause	Review Required	Variable	Depends on evidence
IRS Error Correction	If IRS made computational or procedural error	High if error proven	Full penalty if IRS error
IRS Appeals Office	Available after IRS rejection	Moderate - negotiate settlement	Often 50-80% reduction
Tax Court Petition	After 90-day letter	Variable - formal litigation	Potentially full penalty

Item	Required	Notes
Penalty notice copy	Yes	Include notice date and penalty amount
Tax return copy	Yes	Show filing date and tax due
Written statement	Yes	Explain circumstances in detail
FTA request letter	Optional	If FTA eligible, separate request

Step	Deadline	Action
Initial Penalty Notice	Received	Review penalty, gather initial documents
Abatement Request	Within 30-60 days	Submit FTA or reasonable cause request
IRS Response	45-90 days after request	Wait for IRS decision letter
Appeals Protest	30 days from rejection	File written protest to Appeals Office
Appeals Conference	Scheduled date	Present case to Appeals Officer
Tax Court Petition	90 days from SNOD	File petition if Appeals unsuccessful

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