IRS First-Time Penalty Abatement

1 year ago · 3 min read


The first-time punishment suspension ( FTA ) release is an administrative release that the IRS may grant to relieve taxpayers from failure-to-file, failure-to-pay and failure-to-deposit penalties if certain criteria are met. The policy behind this operation is to reward taxpayers for having a clean conformity history ; everyone is entitled to one error. Individuals and businesses may request FTA for any failure-to-file, failure-to-pay or failure-to-deposit penalty. FTA does not apply to early types of penalties such as the accuracy-related penalty, returns with an event-based charge necessity like Forms 706 or 709 and information report that is dependent upon early diverse filings.

Additional guidance

mention to IRM, Reasonable Cause Assistant (RCA), and IRM, First Time Abate (FTA). To qualify for the FTA release, a taxpayer must meet the watch criteria :

  • Filing compliance : Must have filed ( or filed a valid elongation for ) all required returns and can ’ t have an outstanding request for a retort from the IRS .
  • Payment compliance : must have paid or arranged to pay all tax due ( can be in an installation agreement if the payments are stream ) .
  • Clean penalty history : Has no prior penalties ( except a potential estimate tax punishment ) for the precede three years .

note that per IRM, Criteria for relief from penalties, penalty relief under administrative waivers, which includes FTA, is to be considered and applied before reasonable induce.

Request penalty abatement by phone

A tax practitioner may call the IRS Practitioner Priority Service ( PPS ) line at 866.860.4259 to request FTA if his or her client ’ south case international relations and security network ’ metric ton being handled by a particular conformity unit ( examination, solicitation, and so forth ). If the character is being managed by a specific unit, the practitioner should call that unit to request FTA. A tax practitioner will need world power of lawyer authority to request penalty abatement for a customer over the call ( Form 2848, Power of Attorney and Declaration of Representative ). The IRS personnel who takes the call should be able to pull up the client ’ randomness account, determine if the FTA criteria are met and apply the release during the call. The taxpayer would by and by receive a letter in the chain mail argue that the penalties were removed based on FTA criteria. If the taxpayer does n’t receive the letter within 30 days from the date of the predict, it is advisable to follow up with the IRS. Tip : Calling the IRS is frequently the choose approach to request FTA as often penalties can be removed cursorily during the phone call. however, at times the penalty sum may be excessively high for the IRS to abate over the earphone. If then, the tax practitioner should write a letter to the IRS to request FTA. additionally, if the IRS abates penalties over the telephone, it is advisable to write a letter to the IRS to confirm the conversation ( include the date of the call, the agentive role ‘s identify and the agent ‘s identification number ) .

Request penalty abatement by mail/letter

rather of calling the IRS, a tax practitioner may write to the IRS to request FTA on behalf of his or her customer. Include all relevant data in the request ( taxpayer diagnose, identification number, tax year/period, tax form and penalty type and measure ). clearly state that the node meets the FTA criteria. Consider attaching customer transcripts that prove filing/payment submission and a clean penalty history adenine well as a valid baron of lawyer ( Form 2848 ). Be surely to include page numbers and the taxpayer ’ randomness appoint and the death four digits of their recognition numeral on all pages sent to the IRS .

Other considerations

  • FTA alone applies to one tax year/period. If a request for penalty relief is being considered for two or more tax years/periods and the earliest tax year/period meets FTA criteria, penalty relief based on FTA alone applies to the earliest tax year/period. penalty relief for all subsequent tax years/periods will be based on other easing provisions, such as fair cause criteria .
  • If the IRS hasn ’ t assessed the penalty, for exemplar, a client is filing a hark back deep and failure-to-file and failure-to-pay penalties will apply, the taxpayer may attach a penalty nonassertion request to the late-filed tax return .
  • If a client has already paid the penalty, he or she may file Form 843, Claim for Refund and Request for Abatement, to request a refund.
  • If the IRS does n’t grant penalty easing, consider taking the subject to Appeals. Appeals may make a different decision based on other factors, such as hazards of litigation .
  • Each case is very different, but if the CPA ( node recommend ) does n’t ask for abatement, he or she ca n’t get stand-in for the node. Clients can save thousands of dollars on penalties ( much with a simple telephone visit or letter to the IRS ) and trust on their tax professional to advocate for them .

Related resources

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