What Is First-Time Penalty Abatement?

Facing penalties from the IRS for a missed filing or late payment? You may qualify for a one-time pass — if you meet the IRS's criteria. This article applies to U.S. federal tax law and explains how First-Time Penalty Abatement (FTA) works. TaxRise helps taxpayers reduce or resolve IRS penalties legally through proven relief strategies like FTA.

First-Time Penalty Abatement is an IRS resolution method that allows eligible taxpayers to remove certain penalties for late filing, late payment, or failure to deposit if they have a clean compliance history.

What This Means

The IRS imposes penalties when you file or pay your taxes late. These penalties can add up fast, sometimes as much as 25% of your total tax bill. First-Time Penalty Abatement gives you the chance to remove those penalties if it’s your first mistake and you’ve otherwise been compliant.

It’s one of the easiest ways to reduce your IRS bill, but you have to know how and when to request it.

Why the IRS Offers First-Time Penalty Abatement

First-Time Penalty Abatement was created to encourage voluntary compliance by offering a second chance to otherwise responsible taxpayers. The IRS understands that people occasionally make mistakes, and if you’ve had a clean record for the past three years, they’re willing to waive penalties once.

This policy helps the IRS focus enforcement on repeat offenders while rewarding good-faith efforts to stay compliant.

Who Qualifies for First-Time Penalty Abatement

• Taxpayers who were penalized for late filing or late payment
• Businesses penalized for failing to deposit payroll taxes on time
• Individuals with a clean three-year compliance history
• People who have filed all required returns or are in the process of doing so

First-time penalty abatement is available for individuals and businesses, but not everyone qualifies. That’s why it’s important to understand the requirements before making a request.

What You Can Do For Penalty Relief

Here’s how to determine if you qualify and how to request First-Time Penalty Abatement:

• FTA Eligibility Requirements:
  • No penalties (except estimated tax penalties) in the previous 3 years
  • Filed all required tax returns or valid extensions
  • Paid — or arranged to pay — any tax due
• How to Request FTA:
  • Call the IRS at 1-800-829-1040 and request FTA verbally
  • Send a written request using IRS Form 843 (Claim for Refund and Request for Abatement)
  • Work with a tax relief professional to ensure proper documentation and communication

Tip: Even if you don’t qualify for first-time penalty abatement, you may be eligible for penalty relief based on reasonable cause such as illness, natural disaster, or financial hardship.

How TaxRise Can Help

TaxRise helps individuals and businesses reduce or resolve IRS penalties — including First-Time Penalty Abatement. We analyze your IRS record, verify eligibility, and file the right paperwork to improve your chances of success. Our team also explores other tax resolution options to reduce your total tax liability.

Schedule a free consultation today and find out if you qualify for First-Time Penalty Abatement or other forms of IRS tax relief.

Frequently Asked Questions

• What penalties can be removed with first-time penalty abatement?
  FTA applies to failure-to-file, failure-to-pay, and failure-to-deposit penalties. It does not apply to accuracy-related or fraud penalties.
• Can I use first-time penalty abatement more than once?
  No. It’s a one-time benefit per taxpayer per entity. You may qualify again in the future if your compliance history resets.
• How long does it take to get a response?
  If you call the IRS, abatement may be granted immediately, but wait times on the phone can be long. Written requests may take several weeks to process.

Reviewed by TaxRise Tax Professionals
This article was reviewed by the TaxRise Tax Professional Team. TaxRise has helped thousands of Americans eliminate millions in IRS and state tax debt. This content is for informational purposes only and is not legal or tax advice.