Question 1

What is First-Time Penalty Abatement (FTA)?

Accepted Answer

FTA provides one-time relief for certain penalties if you have a clean compliance history for the past 3 years (filed all returns, paid or arranged to pay all tax due). Available for failure-to-file, failure-to-pay, and failure-to-deposit penalties.

Question 2

What qualifies as reasonable cause for penalty relief?

Accepted Answer

Reasonable cause includes circumstances beyond your control: serious illness, death in immediate family, natural disaster, fire, casualty, inability to obtain records, or unavoidable absence. Must provide documentation supporting the circumstances.

Question 3

Can accuracy-related penalties be abated?

Accepted Answer

Accuracy-related penalties (negligence, substantial understatement) can only be abated with reasonable cause, not FTA. You must show you acted with reasonable reliance on a professional or had substantial authority for your tax position.

Question 4

How do I request penalty abatement?

Accepted Answer

Submit written request with Form 843 or correspondence explaining circumstances. Include supporting documentation. FTA requests may be made by phone. IRS reviews each request individually - abatement is discretionary.

Question 5

What documentation do I need for reasonable cause?

Accepted Answer

Documentation depends on circumstance: medical records for illness, death certificate for family death, FEMA/insurance documentation for disaster, proof of records request. The more compelling evidence, the better your chances.

Tax Penalty Relief Calculator

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Best Available Relief: First-Time Abatement

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First-Time Abatement (FTA)

Reasonable Cause Relief

Statutory Exception