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First Time Penalty Abatement

  • August 2019 | by Abbott Pratt & Associates

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    Receiving correspondence from the IRS will unnerve anyone, especially correspondence that has assessments for penalty charges included! The IRS realizes, however, that everyone is entitled to make a mistake and under certain conditions, you may be eligible to request an abatement of the assessed penalty charges reflected on the notice.

    This abatement waiver can decrease or eliminate assessed penalty charges. The objective of the waiver, which started in 2001, is to provide a form of relief to taxpayers who are usually compliant and in good standing with the IRS. The waiver can be used for a variety of different penalties, including, failure to file and failure to pay. This abatement request is eligible for individuals and businesses as well.

    Below is a list of preconditions that a taxpayer must meet in order to qualify for this abatement:

    • In the prior 3 tax years, you had no penalties on tax returns
    • All tax returns required to be filed have been filed or are on extension
    • You have no outstanding tax liabilities or you have a formal arrangement in place to pay these liabilities

    Requesting a First Time Penalty abatement can be done by phone or by writing a letter to the IRS. No one likes notices, but, if you do receive one, make sure to first consider the first-time penalty abatement before you write that check to the IRS.

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