First-time penalty abatement: getting an IRS penalty waived

You filed late, or paid late, and now there's a penalty on top of the tax. Before you resign yourself to paying it, know this: the IRS has a standing program called First-Time Abatement (FTA) that waives certain penalties for taxpayers with an otherwise clean record — often for the cost of a single phone call or a short letter. It's one of the most useful taxpayer rights almost nobody knows exists, precisely because the IRS doesn't advertise it.

What FTA can waive

• The failure-to-file penalty (5% per month of unpaid tax, up to 25%).
• The failure-to-pay penalty (0.5% per month).
• The failure-to-deposit penalty (for businesses with payroll deposits).

Note what it does NOT waive: interest. Interest is charged by law on late tax and generally can't be abated (though interest on an abated penalty comes off with it). FTA also doesn't erase the underlying tax — you still owe that. It targets the PENALTIES, which for a big balance can run into the thousands.

Who qualifies

The core requirement is a clean compliance history. You generally qualify for FTA if: you had no penalties for the three tax years before the year in question, you've filed all currently required returns (or an extension), and you've paid or arranged to pay any tax due. The name is slightly misleading — it's not literally your first-ever filing; it's about a clean recent record. Many people who've filed for decades still qualify because they simply haven't had a penalty in the last three years.

How to request it

1. Make sure you're compliant first: all required returns filed, and the tax paid or on a payment plan.
2. Call the number on your penalty notice and simply ask for 'first-time penalty abatement.' Agents can often grant it on the spot.
3. Or request it in writing (some use Form 843) if you prefer a paper trail or the call route stalls.
4. If FTA doesn't apply, ask about 'reasonable cause' abatement instead — a separate path for penalties caused by circumstances beyond your control (serious illness, disaster, records lost in a fire).
5. Confirm the abatement in writing and check that any interest on the removed penalty came off too.

The bottom line

First-time penalty abatement waives failure-to-file and failure-to-pay penalties for taxpayers with a clean three-year record who are now compliant — often instantly, over the phone, for free. It won't erase the tax or the interest, but the penalties are frequently the largest add-on, and the IRS grants FTA routinely to those who simply ask. If you're facing a penalty and haven't had one recently, request it before paying; if you don't qualify, ask about reasonable-cause relief instead.