IRS Penalty Abatement: Relief Options and How to Qualify

IRS penalties add up quickly, but you may be able to reduce or remove them. Penalty abatement is the IRS’s formal process for forgiving certain penalties when you qualify. Below we explain the relief types, who’s eligible, what evidence matters, and exactly how to file a request that has the best chance of success.

What Is Penalty Abatement?

Penalty abatement is a relief mechanism for taxpayers who can show a credible reason for missing tax deadlines or requirements. It isn’t automatic—you must meet the criteria for a specific program and follow the request process. In many cases, the IRS will remove the penalty entirely; in others, it may reduce the amount.

Types of Penalty Abatement

First‑Time Abatement (FTA)

FTA rewards prior compliance. If you’ve filed required returns (or valid extensions) and have no penalties in the previous three years, you can often get a first penalty removed. Example: Jasmine, who has a clean history, missed one filing deadline—her FTA request is likely to succeed.

Reasonable Cause Relief

Reasonable cause applies when circumstances beyond your control caused the issue—serious illness, death in the family, records destroyed in a disaster, and similar events. The key is documentation that connects the event to the missed requirement and shows you acted responsibly once able.

Statutory Exception

If an IRS notice or written advice led you astray, or a penalty arose from specific statutory situations, you can request relief under the applicable regulation. Provide the notice/advice and proof you relied on it in good faith.

Who’s Eligible?

• • Clean three‑year history for FTA (no significant penalties)
• • Evidence that supports reasonable cause (medical records, insurance claims, timelines)
• • Written IRS guidance or statutory basis for exception requests

How to Request Penalty Abatement

1. Confirm which relief path fits (FTA, Reasonable Cause, or Statutory Exception).
2. Call the number on your IRS notice to start the conversation, or prepare a written submission.
3. For written requests, use Form 843 (Claim for Refund and Request for Abatement) and attach your evidence.
4. Include timelines, records, and statements showing when/why you couldn’t comply—and what you did once you could.
5. Keep copies of everything and track your case. Processing can take weeks, sometimes longer.

Additional Considerations

If the penalty remains after review, you may appeal through the IRS Office of Appeals. Strong documentation and a clear narrative make the difference. Interest usually continues to accrue unless the penalty is fully removed—planning cash flow is important.

Why Penalty Abatement Matters

Penalties amplify tax debt and stress. Knowing your options—and requesting relief correctly—can cut costs, resolve notices faster, and help you stay compliant going forward.