How to Request First-Time Penalty Abatement: A Practical Guide

Let’s face it—no one enjoys getting an IRS penalty notice in the mail. It’s stressful, frustrating, and sometimes, just plain confusing. The good news? If you’ve been hit with a penalty for the first time, you might be able to wipe it away with First-Time Penalty Abatement (FTA). But here’s the catch: most taxpayers don’t even know this option exists, and many professionals aren’t taking full advantage of it for their clients.

So, how does it work? Is it as simple as picking up the phone and asking for a do-over? Well, sort of. But there are a few things you need to know before making that call. In this guide, I’ll walk you through the who, what, and how of first-time penalty abatement—without drowning you in IRS jargon.

Who Can Get First-Time Penalty Abatement?

Before you spend time crafting the perfect request, let’s make sure you actually qualify. The IRS isn’t just handing out penalty waivers to anyone who asks—they have some specific rules in place.

To be eligible, you need to check these three boxes:

• No prior penalties in the past three years.
• All required tax returns are filed (even if late).
• Taxes are paid in full or you’ve set up a payment plan with the IRS.

If you meet these criteria, congratulations! You have a strong case for getting that penalty erased. If not, don’t worry—there are other ways to request relief, which I’ll cover in a bit.

How to Request First-Time Penalty Abatement (The Right Way)

Now that you know you qualify, let’s get to the good part—actually getting that penalty removed.

Step 1: Get Your Tax Info in Order

The IRS will want to see that you’re in good standing, so make sure you:

• Have a copy of the IRS penalty notice you received.
• Review your tax payment history for the past three years.
• Confirm that all required returns have been filed and taxes paid.

Think of this as gathering your receipts before asking for a refund. The more prepared you are, the smoother this process will be.

Step 2: Make the Call (or Write a Letter)

You have two options here:

• Call the IRS – The fastest way to request penalty abatement is by calling 1-800-829-1040. Be ready to explain why you qualify. If everything checks out, they might approve it on the spot.
• Send a Written Request – If you prefer to go the paper route, you’ll need to submit IRS Form 843 (Claim for Refund and Request for Abatement) and mail it to the address listed in your penalty notice.

Step 3: Present Your Case Clearly

When speaking to the IRS (or writing your letter), make sure you:

• State that you are requesting First-Time Penalty Abatement.
• Confirm your clean compliance history (no penalties in the past three years).
• Highlight that all tax returns are filed and payments are up to date.

That’s it. No need for long-winded explanations—just stick to the facts.

What If You’re Denied (Or Don’t Qualify for FTA)?

If the IRS says no, don’t panic. There are other ways to request penalty relief:

• Reasonable Cause Relief – If your late payment or filing was due to circumstances beyond your control (like a medical emergency or natural disaster), you can request abatement under reasonable cause.
• IRS Payment Plans – Sometimes, setting up an installment agreement with the IRS can reduce or eliminate penalties over time.
• Appeal the Decision – If your FTA request is denied but you believe you qualify, you can appeal the decision through a Collection Due Process (CDP) hearing.

The key is to not give up too soon—many taxpayers successfully appeal penalty denials when they provide additional documentation.

Tools to Make the Process Easier

Handling IRS penalties manually is no fun. Fortunately, there are tools out there to simplify the process, whether you’re doing this for yourself or for clients.

IRS Resources

• IRS First-Time Penalty Abatement Guide
• Form 843 - Claim for Refund and Request for Abatement

Time-Saving Technology for Tax Pros

• Practice Management Software – Platforms like TaxDome offer client portals, automated tax reminders, and secure document storage, helping accountants stay on top of compliance and prevent penalties in the first place.
• Tax Resolution Software – AI-powered tools can analyze tax histories, flag penalty relief eligibility, and generate pre-filled IRS request forms, saving valuable time.

A little automation goes a long way—especially when dealing with the IRS.

How to Avoid IRS Penalties in the Future

While first-time penalty abatement is great, the real goal is to avoid penalties altogether. Here are a few simple ways to stay out of trouble with the IRS:

1. Set Up Tax Reminders – Missing deadlines is the #1 reason people get penalized. Use a digital calendar or accounting software to track due dates.
2. Use Electronic Payments – Paying online reduces processing delays and helps you avoid late payment penalties.
3. Educate Yourself (or Your Clients) – Understanding tax filing requirements and estimated payment rules can prevent costly mistakes down the line.

Final Thoughts: Take Action Now

First-time penalty abatement is one of the easiest ways to save money on IRS penalties, yet so many taxpayers and accountants don’t take advantage of it.

If you think you qualify, don’t wait—call the IRS or submit your request today. And if you’re a tax pro, make sure your clients know about this option.

At the end of the day, tax compliance is all about staying informed, staying organized, and using the right tools to simplify the process.

Have you ever successfully requested penalty abatement? Drop a comment and share your experience!