The IRS First-Time Penalty Abatement (FTA) is an administrative penalty abatement program that permits qualifying taxpayers to remove penalties for underpayment or failure to submit a tax return or failure to deposit the tax return. Usually a clean compliance history for the last three years is necessary.

IRS First-Time Penalty Abatement (FTA) Eligibility Criteria

What Is IRS First Time Abate?

IRS First Time Abate is an administrative waiver that can waive penalties for those who have a good filing and payment history. First Time Abate is not primarily based on hardship, illness, disaster or other personal circumstances like reasonable cause relief. It’s primarily based on your previous tax compliance.

Your account history is used to see if you’re following the rules for the IRS. IRS may waive penalties if you are eligible without having to provide a lengthy explanation or lengthy supporting document.

Why IRS First Time Abate Matters

The Internal Revenue Service (IRS) penalties can add up quickly. Failure-to-file, failure-to-pay or failure-to-deposit penalties can exacerbate a manageable tax situation to be a much larger issue. Many people don’t realize that they may be eligible to get IRS penalty abatement first time relief and still pay those penalties.

First Time Abate is important because it could help lower the overall debt. If the penalty is removed by the IRS (the Internal Revenue Service), then so may be interest on the penalty. But usually the interest on the original unpaid tax is retained.

The IRS First Time Abate penalty waiver can save many tax payers hundreds or thousands in penalties for which they would otherwise be liable, and save them the trouble of solving their account for lesser penalty.

Which Penalties Qualify for IRS First Time Abate?

Not all IRS penalties are eligible. First Time Abate is typically only used for certain filing, payment, deposit penalties.

Failure-to-File Penalty

For a first failure to file penalty, a taxpayer may have to file a belated return if he/she files a required return after the deadline. This may encompass, for example, individual tax returns, partnership returns, and S corporation returns.

If, for instance, you’ve always filed your taxes in time, but missed out on filing a certain year’s tax return, the IRS may impose a penalty. You may be eligible for relief if you have had a good compliance record.

Failure-to-Pay Penalty

A failure to pay penalty may be applicable in the event that the first time the abatee fails to pay penalty associated with the tax that was shown on the return and the tax was not paid on time. It can also be used to apply if tax was required to be showed on a return, but was not paid after IRS notice and demand.

This is typical of situations where the taxpayer files the return, but can’t pay the entire amount in one lump sum. First Time Abate will remove some of the penalty, but there may still be unpaid tax and interest.

Failure-to-Deposit Penalty

The typical first time abate failure to deposit penalty is an event that impacts businesses. This penalty can be imposed if the payroll tax or employee tax deposits were not made on time, the correct method, the correct amount or at all.

But it’s a warning for business taxpayers because there are other rules that may apply here, particularly if there have been a number of previous waivers of the deposit penalties or EFTPS avoidance problems.

Penalties That Usually Do Not Qualify

Not all IRS penalties apply to First Time Abate. The penalty for underpayment of estimated tax is different from failure-to-pay penalties. Typically, a different relief argument is required for penalties for inaccuracies. Certain information return penalties, event based filing penalties and daily delinquency penalties may not be eligible.

IRS First-Time Penalty Abatement (FTA) Requirements

Eligibility is the most important aspect of the process. The first time abate requirements by the IRS are primarily based on your compliance history over the past year or two.

1. You Filed the Same Type of Return for the Prior Three Years

The IRS will consider the three tax years running up to the year or period of the penalty to determine if these First Time Abate Requirements are met. If you have a return you should have filed the same type of return if you had to.

For instance, when you are seeking relief for a tax penalty on your 2024 1040, the IRS might consider your tax filings for 2021, 2022 and 2023. That could be taken into account if you didn’t have to file one of those years.

2. You Had No Disqualifying Penalties in the Prior Three Years

The IRS will also look to see if penalties were issued for the previous three years. This may be referred to as the First Time Abate clean history requirement for the first time abate.

Just because you’ve been penalized once, doesn’t mean you are disqualified the next time. It’s possible it won’t stop approval if the penalty was removed due to reasonable cause or IRS error. But if you were previously given the First Time Abate, then this may have an impact on your possibilities.

3. You Are Current With Filing Requirements

Please be aware that all the returns required are due before seeking relief. A delay or denial in return may result from missing returns. If your account is still non-compliant with the IRS, there is a lower chance that you will be given penalty relief.

4. You Have Paid or Arranged to Pay the Tax

First Time Abate might be available even if the tax has not been paid completely. If you still have a balance due, however, the failure to pay penalty will keep accruing until you pay your taxes.

If you’re unable to pay the balance, you can establish an installment agreement or you can make a good-faith payment, which can help minimize future issues.

5. Business Taxpayers May Have Extra Rules

The IRS might consider other factors for businesses, particularly for employers who are at risk of failure-to-deposit penalties. First Time Abate may not be available for the business if the business has had multiple failure-to-deposit penalty waivers or the penalty was for the reasons listed above — EFTPS avoidance.

IRS First Time Abate and Unpaid Tax

First Time Abate will take away some of the penalties, but the tax debt will not be eliminated. Suppose you owe $8,000 in taxes and the IRS charges you a $1,200 penalty, then if the penalty gets abated, you will still be responsible for the $8,000 in taxes.

In short, is interest removed in a common first time abate IRS? It’s a bit yes and a bit no. Interest for the deleted penalty can be lowered or eliminated. Interest will continue on unpaid tax until tax is paid.

That’s why it makes sense to do penalty relief and tax debt resolution together. The penalty is a good thing to remove, but a plan for the rest of the tax debt is needed.

How to Request IRS First-Time Penalty Abatement

Requesting IRS first time abate will help to save time and avoid needless denials. Steps to take before calling the IRS.

1: Review Your IRS Notice

Create a record of the IRS notice. Check the notice number, tax year or tax period, penalty type, penalty amount, IRS phone number and response deadline.

If you’re facing IRS first time abate after notice, do not ignore IRS letter. The notice describes the action that IRS took, and what steps you must take to respond.

2: Confirm the Penalty Type

Determine if penalty is for failure to file, failure to pay, or failure to deposit. First Time Abate may not be the appropriate relief if the notice indicates that an estimated tax penalty, accuracy related penalty, or information return penalty is being imposed.

3: Check Your Three-Year Compliance History

Check your filing and payment records from the last 3 years. That’s where First Time Abate prior three years explained comes in handy. It is essential to determine if you have filed all required returns, and if you have had any prior penalties.

4: Request Relief by Phone

This is usually the quickest way, if it is a first time abate phone request with the IRS. Please contact the number listed on the notice and request that the IRS representative look at your account for First Time Abate eligibility.

Make sure you have the following information on hand:

• Your IRS notice
• Tax year or period
• Penalty amount
• Penalty type
• Taxpayer identification information
• Proof that required returns are filed
• Payment plan details, if applicable

5: Request Relief in Writing

You can submit a written request if you do not have phone relief or the IRS representative is unable to approve your request. This could be an IRS first time abatement letter or IRS first time abate Form 843 (if applicable).

A written request should be concise, to the point and structured. A long emotional letter is not warranted if requesting a First Time Abate. The bottom line is that you are seeking administrative relief due to your good record of compliance.

IRS First Time Abate Phone Request: What to Say

Hello, I received an IRS notice for tax year [YEAR] indicating that there is a penalty. I would like to request First Time Abate (FTA) penalty relief, as I believe I have a clean compliance history for the past three years and have filed all tax returns required. Would you be able to check my account and determine if this penalty is a First Time Abate?

Remain composed and in businesslike manner. Avoid disagreeing with the representative. If you believe that you are eligible, ask, if it is removed, keep a record of that information and ask for a confirmation.

IRS First Time Abatement Letter or Written Request

Request should contain:

• Taxpayer name
• Social Security Number, ITIN, or EIN
• Tax year or tax period
• Notice number
• Penalty type
• Penalty amount
• Statement requesting First Time Abate
• Brief explanation of clean compliance history
• Signature
• Supporting documents, if also requesting reasonable cause

Sample Wording

I am requesting penalty relief pursuant to the IRS “first time abate” administrative waiver, and I believe I am eligible because I had no disqualifying penalties on my tax returns for the last three years and I filed them.

If you are also making a reasonable cause argument, add supporting documents to your claim, like medical records, disaster records, death certificates, correspondence, payment records, and proof of reasons out of your control.

Should You Use Form 843 for IRS First Time Abate?

Certain penalties, interest, taxes and fees may be abated by using Form 843, Claim for Refund and Request for Abatement. This may come in handy if you’ve already paid the penalty and wish to get a refund, or if the IRS requests a written request.

But, the Form 843 is not necessarily the initial action. The first call many taxpayers make is to the IRS number on the notice. If this doesn’t work, a written request or Form 843 may be another one of the alternatives available.

IRS First Time Abate vs Reasonable Cause

Even if you don’t meet the First Time Abate criteria, reasonable cause might still be possible. If, for instance, you were hospitalized, impacted by a natural disaster or for some reason for which you have no control over you are unable to get records, you may have more reasonable cause than you would have with First Time Abate.

2026 Update: Automatic Exemption from Penalty and First Time Abate

The most notable change is the automatic exemption 2026 program (AEP) by IRS, also known as AEP. AEP will allow similar relief for eligible taxpayers to begin in summer 2026.

The big difference between AEP and “first time abate” is the time and taxpayer response. The penalty is imposed with First Time Abate, and the taxpayer will have to reach out to the IRS or request a meeting. Under AEP, eligible taxpayers might not be subject to the penalty at all.

AEP is for 2025 tax year returns and 2026 quarterly returns (and future periods). It can be used for specific individual, business and employment tax returns. In the event the IRS utilizes AEP, it ought to mail a letter to the taxpayer saying that penalties are not being imposed due to the taxpayer’s timely compliance history.

However, First Time Abate is relevant to previous years, previously issued notices and when there has already been a penalty issued.

What If IRS First Time Abate Is Denied?

When you receive your notice from IRS, first time abate, don’t give up. Before reviewing the reasons for the IRS denial, review why they denied the request. Is the type of penalty disallowed? Has IRS previously discovered penalties? If required returns were not given, were they left out? Has the IRS indicated that you’ve already used First Time Abate?

Then, determine if reasonable cause relief is available. If there are facts and documents to back up your case, you can put in your written request. You can also appeal in some instances.

This is also where taxpayers are likely to ask, can I get First Time Abate twice? First Time Abate will generally be based on a prior compliance period in which there was no prior notice of violation. Having previously been prescribed First Time Abate for the lookback period may make it impossible to be approved. However, it’s subject to tax period, penalty history and IRS account records.

Common Mistakes to Avoid

Avoid these mistakes when requesting First Time Abate:

1. Requesting relief for the wrong penalty.
2. Asking before all required returns are filed.
3. Assuming First Time Abate removes the tax balance.
4. Thinking all interest will disappear.
5. Sending a vague letter with no tax year or notice number.
6. Ignoring the IRS response deadline.
7. Forgetting to ask about reasonable cause if First Time Abate is denied.
8. Treating business payroll penalties the same as individual tax penalties.

Example Scenarios

1: Individual Filed Late One Year

Maria has returned late for 2024, while returning the previous three years on time. She was given a failure to file penalty. If she doesn’t have any disqualifying penalties in the previous three years, she might be eligible for First Time Abate.

2: Taxpayer Paid Late but Has Clean History

David filed his return on time and was not able to pay the total amount of tax before the tax was due. Later he was charged with failure to pay, and was subsequently fined. He may be eligible to get penalty abated, but the back taxes and interest on the unpaid taxes will not be waived.

3: Business Missed Payroll Deposit

A small business failed to make a timely payroll deposit and was fined for failure to deposit. A small business failed to make its payroll deposit on time and was charged with failure to deposit. The business might qualify even if it has a timely compliance history and if it doesn’t have disqualifying deposit penalty issues.

4: Taxpayer Has an Estimated Tax Penalty

If a taxpayer doesn’t pay enough on his quarterly estimated tax, he is penalized with an estimated tax penalty. Other penalty relief options may exist, but may not be First Time Abate.

IRS First-Time Penalty Abatement (FTA) Checklist

1. I received an IRS penalty notice.
2. I know the tax year or period.
3. I know the penalty type.
4. The penalty is failure to file, failure to pay, or failure to deposit.
5. I filed required returns for the prior three years.
6. I had no disqualifying penalties in the prior three years.
7. All required current returns are filed.
8. I have paid or arranged to pay the tax.
9. I have my notice and account details ready.
10. I know whether I will call the IRS or submit a written request.
11. I considered reasonable cause if First Time Abate does not apply.

Cost of Professional Help

A large number of taxpayers simply complete the First Time Abate request themselves, particularly if the IRS notice is straightforward and the type of penalty is one that is eligible for the abatement. But professional assistance might be necessary in instances of a big penalty or if the IRS refuses to accept the request, if business payroll taxes are involved, or if more than one year is impacted.

Foster the person to do some math before hiring someone to help you with IRS trouble: Cost of Hiring a Tax Professional for IRS Relief. There are two possible types of tax professionals who can charge a flat fee or an hourly rate, depending on the complexity of the case, requirement for Form 843, and additional reasonable cause arguments to be prepared.

FAQs About IRS First Time Abate

What is IRS First Time Abate?

IRS First Time Abate is an IRS penalty abatement program for taxpayers who have always complied with the tax laws. May cancel some failure to file, failure to pay or failure to deposit penalties.

Who qualifies for IRS First Time Abate?

Typically the taxpayer is eligible if he or she has filed the same type of required return in the previous three years and had no disqualifying penalties in those years.

What penalties qualify for First Time Abate?

The primary penalties are penalties for failure to file, failure to pay and failure to deposit penalties.

Can I request IRS First Time Abate by phone?

Yes. Taxpayers who receive a notice or letter from the IRS will have many options for requesting relief, by simply calling the phone number listed on the notice or letter.

Do I need Form 843 for First Time Abate?

Not always. Certain requests can be done over the telephone. If you need to request abatement of or a refund on the withheld tax, a Form 843 might be helpful.

Does IRS First Time Abate remove interest?

May deduct or cap the interest on the abated penalty. Typically will not eliminate interest on unpaid tax.

Can I get First Time Abate if I still owe tax?

YES, you can apply for relief even though the tax isn’t paid in full! Failure to pay penalties, however, could remain in force until the tax is paid.

Can businesses use First Time Abate?

Yes. While businesses may be liable to certain penalties, such as failure-to-deposit penalties, there may be other rules that apply.

What if my First Time Abate request is denied?

Read the denial reason, see if you’ve been compliant in the past, and look into reasonable cause relief, and respond within any time frame listed on the IRS notice.

Can I get IRS penalties waived once?

Yes, you can apply for IRS relief of penalties once, in the form of First Time Abate or similar, if you qualify.

Conclusion

IRS First-Time Penalty Abatement (FTA) may be a good choice if you were charged with a penalty, but you’ve had a great track record of filing and paying your taxes on time. The bottom line is to verify what the penalty is, check your compliance record for the last three years and seek relief in the proper method.

In some cases, a telephone request may be sufficient. If the penalty amount is substantial, IRS does not grant relief and your situation is related to business taxes, professional assistance is recommended prior to paying penalties which may be removable.