Background

First‑Time Penalty Abatement (FTP), sometimes called First‑Time Abate (FTA), is an IRS administrative waiver designed to help taxpayers who slipped once but otherwise stayed compliant. It commonly applies to failure‑to‑file, failure‑to‑pay, and certain failure‑to‑deposit penalties for a single tax period when eligibility requirements are met. FTP does not remove interest; interest on unpaid tax generally continues to accrue (IRS, Penalty Relief: https://www.irs.gov/payments/penalty-relief).

Step‑by‑step: How to apply

1) Confirm eligibility

  • No penalties assessed in the prior three tax years (assessed or pending). The IRS looks at your penalty history for the three years before the tax period in question.
  • All required returns filed (or valid extensions in place) for the past three years.
  • You have paid, or arranged to pay, the tax due for the period being abated.

2) Gather documentation

  • Account identifiers: SSN/ITIN/EIN, tax year, form (e.g., Form 1040), IRS notice number.
  • Copies of prior tax returns or proof of prior filings to show the three‑year compliance history.
  • Proof of payment or payment arrangement (bank statements, installment agreement confirmation).
  • If you are using a representative, a signed Form 2848 (Power of Attorney) or Form 8821 (Tax Information Authorization).

3) Submit your request (three common routes)

  • Online: Use your IRS Online Account to view your balance and request penalty relief when the option is available. This is often the fastest route.
  • Phone: Call the number on your IRS notice. Explain you’re requesting First‑Time Penalty Abatement and provide the penalty details. Keep a detailed call log (date, representative name, confirmation number).
  • Written request: Mail a concise letter to the address on the IRS notice. Include taxpayer details, the tax period, the penalty type, and a short statement that you meet FTP criteria, plus copies of supporting documents.

4) Follow up & track the result

  • Expect a response in several weeks; many cases resolve within 30 to 90 days but can take longer. Check your IRS Online Account and transcripts for updates. If the IRS approves, the penalty line will be removed but interest usually remains.

When to escalate or use an alternative

Real‑world examples (short)

  • Small business with a cash‑flow shortfall: Owner paid late but had spotless prior filings. FTP removed the failure‑to‑pay penalty after the owner provided prior returns and proof of payment arrangement. Interest on the unpaid tax remained.
  • Individual with a one‑time late filing due to hospitalization: After submitting documentation and calling the IRS to request FTP, penalties were abated and the taxpayer avoided additional financial strain.

Common mistakes to avoid

  • Assuming FTP removes interest — it usually does not.
  • Failing to include clear account identifiers or proof of past compliance; incomplete requests delay decisions.
  • Waiting to act: missing a notice’s deadline or not responding to IRS correspondence can reduce options for relief.

Practical tips from practice

  • Start with the IRS Online Account — it often shows penalty waiver options faster.
  • Keep a call log when you speak with IRS agents and confirm any approval in writing (notice or transcript).
  • If you’re unsure how to present documentation, use a short, factual cover letter when mailing your request and include copies, not originals.

If FTP is denied: next steps

Timing and expectations

  • Typical processing: 30–90 days, but complex cases take longer. Keep documentation and expect interest to continue until tax is paid.

Authoritative sources

Disclaimer

This article is educational and does not constitute tax advice. Rules change and individual cases differ; for personalized advice contact a qualified tax professional or CPA. If you represent someone, use Form 2848 to establish authority before contacting the IRS.