Specializing in tax resolution and small business accounting.

Penalty Abatements

How to avoid penalties and interest

Requesting Abatement or Refund of Interest Due to IRS Error or Delay

Taxpayers that are hit with IRS penalties can request the penalties to be abated.  Abated means to completely or partially remove or forgive the penalty.  In many cases where a taxpayer requests abatement, the IRS will remove the penalty for a reasonable cause.

The IRS may provide administrative relief from a penalty that would otherwise be applicable under its First Time Penalty Abatement policy.

You may qualify for administrative relief from penalties for failing to file a tax return, pay on time, and/or to deposit taxes when due under the Service’s First Time Penalty Abatement policy if the following are true:

  • You didn’t previously have to file a return or you have no penalties for the 3 tax years prior to the tax year in which you received a penalty.
  • You filed all currently required returns or filed an extension of time to file.
  • You have paid, or arranged to pay, any tax due.

The failure-to-pay penalty will continue to accrue, until the tax is paid in full. It may be to your advantage to wait until you fully pay the tax due prior to requesting penalty relief under the Service’s first time penalty abatement policy.

Other administrative relief: If you received incorrect oral advice from the IRS, you may qualify for administrative relief.