How do I request penalty abatement for first-time penalty relief?
First-time penalty abatement (FTA) is a straightforward administrative relief the IRS can grant to taxpayers who meet narrow eligibility requirements. This guide explains who qualifies, how to request FTA, what to include in your request, common pitfalls, realistic expectations about timing and interest, and next steps if the IRS denies the request. Sources include IRS guidance on penalty relief and how to request it (IRS.gov) and the agency’s First-Time Penalty Abatement FAQs (irs.gov).
Who typically qualifies
- Clean penalty history: No penalties (excluding estimated tax penalties in many cases) for the three tax years prior to the tax year in which the penalty was assessed. The IRS looks back three tax years for penalty history. (IRS: “Penalty Relief”)
- Required returns filed: You must have filed all required returns or filed valid extensions for the years in question.
- Payment or arrangement: You need to have paid the tax due or set up an acceptable payment arrangement (for example, an installment agreement) before requesting FTA.
Note: FTA most commonly applies to failure-to-file (FTF), failure-to-pay (FTP), and failure-to-deposit (FTD) penalties. It does not automatically waive interest; interest on unpaid tax generally continues to accrue until taxes are paid (IRS: “How to Request Penalty Relief”).
How to request first-time penalty abatement
You can request FTA using one of these methods. Choose the route most convenient for your situation.
1) IRS telephone or automated systems
- Call the IRS number shown on your notice, or the general taxpayer phone line. An IRS representative can review your account and—if you qualify—request an administrative abatement. Keep a record of the representative’s name, date, and any reference number.
2) Online tools or taxpayer account
- The IRS periodically offers online penalty relief tools through a taxpayer’s online account. Log in to your account at IRS.gov and check the penalty relief options. Availability can change, so if you don’t see it, use another method. (IRS: “Penalty Relief”)
3) Written request (recommended when you need to provide documentation)
- Send a concise letter to the IRS address shown on the penalty notice. A written request gives you the best chance to attach supporting documents and create a clear record.
- Include in your letter: taxpayer name, SSN or EIN, tax year(s) affected, notice number, penalty type and amount, dates involved, and a one-paragraph statement that you meet FTA eligibility (no penalties in prior three years, filed returns, paid or arranged payment). Attach proof of prior years’ compliance if available (e.g., transcripts, prior notices) and proof of payment or the payment plan.
Sample written request (short template)
[Taxpayer name]
[Address]
[Taxpayer SSN or EIN]
[Date]Internal Revenue Service
[Address from notice]Re: Request for First-Time Penalty Abatement for [Tax Year]
Dear Sir or Madam:
I respectfully request First-Time Penalty Abatement for the [penalty type and notice number] assessed for tax year [YYYY]. I have a clean penalty history for the three prior tax years, filed my required returns for [list years or state if returns were timely extended], and I have paid the tax due / set up an installment agreement on [date]. Please remove the penalty assessed for [amount]. I have attached documentation of prior compliance and the payment/arrangement.
Thank you for your prompt attention.
Sincerely,
[Signature]
[Contact phone and email]
Attach copies (not originals) of supporting items: IRS account transcripts, prior notices showing no penalties, proof of payment (bank records), bank statements, or evidence of extension filings.
Documentation that helps
- IRS Account Transcript (shows filing and penalty history).
- Copies of prior tax returns or extension filings.
- Proof of payment: bank records, IRS payment confirmation, or Form 4868 confirmation if you filed for an extension.
- Evidence of reasonable cause if you are also pursuing a reasonable-cause abatement (medical records, death certificates, disaster declarations). For reasonable-cause procedures see our guide: How to Request Penalty Relief for Reasonable Cause (https://finhelp.io/glossary/how-to-request-penalty-relief-for-reasonable-cause/).
Timing and what to expect
- Response time: The IRS often responds within 30–90 days but processing times vary by workload and method of request. If granted administratively, the abatement will appear on your IRS account transcript and a revised notice will be issued.
- Interest: Penalty abatement does not remove interest. Interest on unpaid tax continues to run until the balance is paid in full. The IRS may abate interest only in very limited circumstances.
If the IRS denies your request
- Administrative reconsideration: Ask the IRS to reconsider. Speak to a different representative and request a supervisor review. Keep detailed notes of who you spoke to and when.
- Appeal: You can appeal penalty determinations using the IRS appeals process. The denial letter will include appeal instructions or you can request a Collection Due Process hearing if you were in collection. For wider abatement strategies and options, see Penalty Abatement: When and How to Request Relief (https://finhelp.io/glossary/penalty-abatement-when-and-how-to-request-relief/).
- Consider reasonable-cause relief: If you don’t qualify for FTA, a reasonable-cause abatement (showing that circumstances beyond your control caused the failure) can still succeed when documented properly. See our guide on reasonable cause and sample letters: Crafting a Convincing Reasonable Cause Letter for Penalty Relief (https://finhelp.io/glossary/crafting-a-convincing-reasonable-cause-letter-for-penalty-relief/).
Common mistakes to avoid
- Assuming penalties will automatically disappear: You must request FTA or the IRS must apply it during account review.
- Not filing required returns: Missing required returns typically disqualifies you from FTA.
- Expecting interest to be abated: Interest is separate and generally not abated with FTA.
- Failing to keep records: Without transcripts or proof, your request can take longer or be denied.
Practical examples (anonymized)
- Medical emergency: A taxpayer who had three prior compliant years missed the filing deadline during hospitalization. After filing the return and submitting an FTA request with hospital records and prior-year transcripts, the IRS removed the failure-to-file penalty.
- Business payroll oversight: A small business owner who missed a deposit deadline because of a bookkeeping error qualified for FTD abatement after showing prior compliant deposit history and payment of the tax due.
When to involve a tax professional
- Complex accounts: If penalties span multiple years, involve payroll trust fund issues, or include trust fund recovery penalties (TFRP), seek a CPA, enrolled agent, or tax attorney.
- Appeals and collections: If the IRS denies FTA or the case is in active collection, professional representation can streamline appeals and reduce risk of lien or levy.
Quick checklist before you send a request
- Confirm no penalties on your account for the prior three tax years.
- File any missing returns or extension paperwork.
- Pay the tax due or set up an installment agreement.
- Assemble documentation: transcripts, proof of payment, and any supporting evidence.
- Choose your submission method: phone, online account, or certified mail with a written request.
Authorities and further reading
- IRS — Penalty Relief: https://www.irs.gov/penalties/penalty-relief
- IRS — How to Request Penalty Relief: https://www.irs.gov/penalties/how-to-request-penalty-relief
- IRS — First-Time Penalty Abatement FAQs: https://www.irs.gov/individuals/first-time-penalty-abatement-faqs
Internal FinHelp resources:
- How to Request Penalty Relief for Reasonable Cause — https://finhelp.io/glossary/how-to-request-penalty-relief-for-reasonable-cause/
- Penalty Abatement: When and How to Request Relief — https://finhelp.io/glossary/penalty-abatement-when-and-how-to-request-relief/
- First-Time Penalty Abatement Relief — https://finhelp.io/glossary/first-time-penalty-abatement-relief/
Professional disclaimer: This article provides general information and illustrative examples based on IRS guidance current as of 2025. It does not replace personalized tax advice. For help applying for penalty abatement in your situation, consult a licensed tax professional or the IRS.
