✍️ MoneyVerge Editorial Team 📅 August 2026 ⏱️ 5 min read
📌 Key Takeaway: First-Time Penalty Abatement (FTA) is the easiest and fastest way to remove IRS penalties — no documentation required, just a clean compliance history for the prior 3 years. Call the IRS directly to request FTA. Reasonable Cause abatement requires documentation but can remove penalties for genuine unforeseen circumstances.

Types of IRS Penalty Abatement

First-Time Penalty Abatement (FTA) — Easiest Option

Removes failure-to-file, failure-to-pay, and failure-to-deposit penalties for taxpayers with no penalties in the prior 3 tax years. No documentation required — just request it. Can be done with a single phone call to the IRS (800-829-1040). Most important: file all returns before requesting. FTA applies to one tax year and can save hundreds to thousands in penalties.

Reasonable Cause Abatement

Removes penalties when you can demonstrate you acted in good faith but were prevented from complying due to circumstances beyond your control. Acceptable reasons: serious illness or death of immediate family member, natural disaster, fire or flood affecting records, reliance on incorrect IRS advice, or inability to obtain records. Documentation required — medical records, insurance claims, death certificates, etc.

Statutory Exception Abatement

Removes penalties when the IRS issued incorrect written advice that you relied upon in good faith. Requires the original IRS written advice and documentation that you followed it. Less common but valuable when applicable.

How to Request First-Time Penalty Abatement

  1. Ensure all required returns are filed (IRS will not grant FTA with unfiled returns)
  2. Call IRS at 1-800-829-1040 and say: 'I'd like to request first-time penalty abatement'
  3. The representative will verify your compliance history — 3 clean years
  4. If approved: penalties are removed immediately. If denied: request supervisor review or send written request to the IRS

Frequently Asked Questions

Can the IRS waive interest as well as penalties?

The IRS can waive penalties but generally cannot waive interest — interest is considered compensation for the use of money and is only waived in narrow circumstances (such as when the IRS caused the delay). Penalty abatement is therefore more impactful for high-penalty situations (where penalties have grown to 25% of the tax owed) than for primarily interest-driven balances.

What if my penalty abatement request is denied?

You can appeal a denial through the IRS Independent Office of Appeals — a division separate from collections that provides an independent review. You can also file a Collection Due Process (CDP) hearing request if you've received a Final Notice of Intent to Levy. For large penalty amounts, a tax attorney or enrolled agent can present a stronger case in appeals than most taxpayers can present alone.