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First Time Penalty Abatement

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What is First Time Penalty Abatement?

Abatement refers to the reduction or elimination of IRS penalties, providing significant relief to taxpayers. First Time Penalty Abatement is a program offered by the IRS that allows eligible taxpayers to reduce or eliminate certain tax penalties imposed for failing to meet tax obligations, such as filing taxes on time or paying owed taxes.

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If you’ve recently been penalized by the IRS, you may not realize that there’s a little-known opportunity to have those penalties removed—often without a lengthy dispute or appeal. Through the IRS First Time Penalty Abatement program, qualifying taxpayers can request relief from penalties tied to late filing, late payment, or failure to deposit taxes. It’s a valuable option many overlook, and that’s where we come in.

At J. David Tax Law, our dedicated tax abatement attorneys handle the entire process on your behalf. From preparing a formal penalty abatement request to communicating directly with the IRS, we manage every step with the precision and urgency your case deserves. Whether you’re dealing with unexpected penalties or just learned about IRS Form 843, we provide clear guidance and proven solutions. Our legal team is well-versed in how the IRS interprets its internal guidelines—particularly those found in the first time penalty abatement IRS code section of the Internal Revenue Manual (IRM 20.1.1.3.6.1). This understanding helps us build stronger, more effective requests from the start.

Eligibility Requirements for First Time Abatement

First, you need to understand that certain penalties are eligible for the First Time Penalty Abatement program. These include the IRS late filing penalty (5% per month), the late payment penalty (0.5% per month), and the failure to deposit penalty for certain business taxes.

Each can accrue up to 25% or more depending on how long the debt remains unresolved. The IRS First Time Penalty Abatement program offers one-time relief for these specific penalties if other IRS conditions are met. The following are specific eligibility requirements that must be met to qualify for this first time abatement program:

Clean Compliance History

To qualify for the FTA program, maintaining a clean compliance history for the past three years is essential. This includes not having been assessed significant penalties, such as the IRS late filing penalty or the late payment penalty obligations. The IRS views a clean compliance history as a key indicator of general compliance with tax laws, making it a crucial factor in eligibility for this one-time relief.

No Prior Penalty Abatements

This program offers a one-time relief for taxpayers facing penalties for the first time. This means that if penalty abatement has been granted previously, eligibility for this program is forfeited. The IRS ensures that penalty relief through this program is reserved for those who have not benefited from it before, reinforcing the importance of maintaining compliance after receiving relief. If a taxpayer has already received an IRS abatement for any penalties in the past, they cannot apply for First Time Penalty Abatement again.

Current on Filing and Payment Requirements

To request a tax abatement, it is essential to be current on all required tax filings and payments. This includes having submitted all necessary tax returns and ensuring that any taxes owed are fully paid or managed under an approved payment plan. The IRS requires that there be no outstanding tax obligation not in a resolution or unfiled returns when considering an abatement request. Although we do prepare and file tax returns, our expertise is focused on defending you when a claim is filed against you. Keeping good records and copies of government forms is essential, as it significantly increases the likelihood of a successful resolution with our defense strategies.

Eligible penalties for First Time Penalty Abatement. Call us today & get a sample of the first time penalty abatement letter.

How Our Tax Abatement Lawyers Simplifies Penalty Removal

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Why Do You Need a Tax Attorney for Abatement of Penalties?

Many taxpayers are unaware that the rules for first time penalty abatement can vary when you’re dealing with state agencies such as the FTB (Franchise Tax Board) in California or the Department of Taxation in New York State. Each state may apply different standards or require specific steps. At J. David Tax Law, our legal team understands how to handle these differences and ensure your filing is properly constructed and followed through.

In more complex cases — like those involving penalties tied to income earned through a trust or similar structure — clarity in documentation and argumentation is critical. In one recent case, we helped a client named Ryan save over $150,000 in a state penalty abatement dispute by holding the state accountable to apply procedures correctly.

Whether you’ve received a CP14 notice from the IRS or recently found yourself asking why the IRS charged a late penalty, having the right legal support can make all the difference. If you’re looking for an experienced attorney for IRS penalty help, our firm is trusted nationwide for strategic resolution and results. Our tax attorney brings strategic insight, legal training, and direct experience with how the IRS and state tax authorities interpret requests for relief. Contact us and get IRS penalties removed today!

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What Actions Can You Take If You Don’t Qualify for First Time Abatement?

If you don’t meet the IRS first time penalty abatement criteria, there are still several actions you can take to seek penalty relief from the IRS.

1. Set Up a Payment Plan

If you do not qualify for first time penalty abatement, setting up a payment plan with the IRS can be a practical route to managing your tax debt. A payment plan, or Installment Agreement, enables you to pay off your tax obligations over time, easing the burden of a lump-sum payment.

Though interest and some penalties may continue to accrue, an approved IRS payment plan can help you avoid escalated enforcement such as wage garnishments or tax levies. This option provides breathing room while you resolve your outstanding balance.

2. Submit an Offer in Compromise

Another potential option for taxpayers who do not meet the first time penalty abatement criteria is to pursue an Offer in Compromise. This IRS program allows you to settle your tax debt for less than the full amount owed.

An OIC can also reduce or eliminate penalties when part of a negotiated agreement. It is often the best path for taxpayers facing serious financial hardship who cannot meet their full liability. Many J. David clients who were not eligible for abatement have reduced their total debt by nearly half through strategic offers.

3. Apply for an Administrative Waiver

Unlike first time penalty abatement or reasonable cause relief, an Administrative Waiver may be issued under specific circumstances where the IRS determines that widespread relief is appropriate.

This blanket relief is less common but can be highly effective when the IRS recognizes broader procedural issues or policy-based exceptions that justify waiving penalties without the need for individual appeal.

4. Reasonable Cause Abatement

Taxpayers who miss filing deadlines or payments due to circumstances beyond their control may qualify for reasonable cause abatement. This type of relief differs from first time abate in that it is not limited to one-time use and does not require a clean history.

To succeed, you must show that your noncompliance resulted from an event like illness, natural disaster, or another uncontrollable factor that directly affected your ability to meet your tax responsibilities.

5. Statutory Exception

A statutory exception can apply when the IRS assesses penalties due to an administrative error, misinformation, or failure to communicate tax law changes. If you can demonstrate the penalty resulted from an IRS mistake, this avenue allows for penalty reversal.

This method not only clears unjustified penalties but also ensures that you are not penalized for government oversight. It’s a powerful option for correcting IRS errors and regaining compliance.

6. Seek Professional Tax Assistance

Tax attorneys possess the experience needed to navigate IRS procedures and maximize your chances of securing relief—whether through first time penalty abatement, reasonable cause, or other options.

Every case is unique. Our team evaluates your situation, prepares accurate documentation, and advocates on your behalf in direct communication with the IRS. A free consultation with a trusted J. David Tax Law specialist can help clarify your options and improve your chance of approval or reapplication success.

Frequently Asked Questions

Your Tax Relief Questions, Answered

What is first time penalty abatement and how does it work?

First time penalty abatement (FTA) is an IRS program that allows eligible taxpayers to waive penalties for the first occurrence of non-compliance due to failure to file, failure to pay, or failure to deposit. This relief is granted once per taxpayer and requires a history of previous compliance. Book your free tax consultation with our experienced tax attorneys to guide you through the process, ensuring a clear and effective resolution to your tax concerns.

Can a tax attorney help me with first time penalty abatement?

Yes, a tax attorney can significantly assist with IRS first time penalty abatement by ensuring proper eligibility assessment, preparing necessary documentation, and navigating the IRS processes effectively to maximize your chances of getting the penalty waived. Let our expert tax attorneys streamline your First Time Penalty Abatement process. Contact us today for A+ rated professional tax service!

What is a good reasonable cause for IRS penalty abatement?

A good reasonable cause for IRS penalty abatement is any situation beyond your control that directly prevents you from meeting your tax obligations. Common examples include serious illness, natural disasters, or reliance on incorrect advice from a tax professional. The IRS will consider how the event impacted your ability to file or pay on time, and whether you acted responsibly once the issue was resolved. Strong documentation is essential to support your claim.

What penalties can be waived with a first time penalty abatement?

With first time penalty abatement, the IRS may waive penalties related to failure to file, failure to pay, and failure to deposit. This relief focuses on removing financial penalties accrued from these specific non-compliant actions. Learn more about IRS penalties and how to navigate them effectively with our reliable tax service.

How do you write a first time abatement letter?

To write an IRS first time penalty abatement letter, clearly state your request for penalty relief, reference the specific penalty type, include evidence of your compliance history, and detail any reasonable cause if applicable. Ensure the letter is concise, professional, and includes all necessary taxpayer identification information.

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We provide tax solutions for our clients who have IRS and state tax debts, unfiled returns, audits, etc. We advise you on future compliance that enables your individual or business tax problems to be behind you for good.