IRS penalty relief: ask for it, because the IRS will not offer

Two main routes

First-Time Abate

If you have a clean penalty history for the three prior years, have filed all required returns, and have paid or arranged to pay what you owe, the IRS can waive certain penalties for a single year. It generally covers failure-to-file, failure-to-pay and failure-to-deposit penalties.

Reasonable cause

If you missed a deadline because of something outside your control, such as a serious illness, a death in the family, a disaster, or reliance on incorrect advice, the IRS may remove penalties. It requires specifics and documentation, and the explanation matters.

What relief does not do

Abatement removes penalties and the interest charged on them. It does not remove the tax itself or interest on the tax. It can still shrink a balance significantly, and it is worth requesting before you set up a payment plan or an offer.

Why it is often missed

The IRS does not tell you it is available. Calling and asking sometimes works, and sometimes it is denied for a technical reason that a well-prepared written request would have avoided. We pull your transcripts, identify which penalties are eligible, and make the request.

Whether relief is granted is the IRS’s decision, and it depends on your history and facts.

Related

• Offer in compromise
• IRS payment plans
• Unfiled tax returns
• Levies and wage garnishments
• IRS tax liens
• Audit and appeals
• Payroll tax problems