In order to get IRS Penalty Relief After IRS Notice, contact the toll-free number listed on a notice and ask for First-Time Abate (if you have a 3-year clean history) or submit a written explanation of your Reasonable Cause (such as a natural disaster, serious illness, reliance on poor advice by a professional).

Review the Most Effective and Common Ways to Remove Tax Penalties

1. First-Time Penalty Abate (FTA)

    • Eligibility
    • How to Request

2. Reasonable Cause Criteria

    • Valid Reasons
    • How to Request

3. Statutory Exceptions & Administrative Waivers

    • Statutory Exception
    • Administrative Waivers

4. What to Do Next (Action Steps)

  1. Respond Immediately
  2. Document Everything
  3. File an Appeal if Denied

IRS Penalty Relief After IRS Notice

Being served an IRS notice along with penalties can be stressful; particularly if you feel you have paid your tax or the penalty was a result of something you could not control. Thankfully, a penalty notice from the IRS will not automatically signify you have to pay the entire fine. There are several other factors that may entitle many taxpayers to IRS penalty relief following IRS notice, including First Time Abate, reasonable cause relief, administrative waivers, and IRS error correction.

The first thing you should do if you get a notice with penalties and interest is to carefully read the notice and understand how the penalty was added, verify if you are eligible for any relief, and submit a valid penalty abatement request along with supporting evidence.

What Does an IRS Penalty Notice Mean?

A penalty notice from the IRS indicates that the IRS has imposed an extra charge due to its belief that a tax obligation was not met. It could be related to late filing, late payment, incorrect information, or failure to pay estimated tax payments, among other tax compliance issues.

Penalty is not the same as the amount of the original tax. Your IRS notice could contain:

The IRS notice penalty help search many taxpayers use after they receive a letter, since they don’t know if the amount is right or what to do.

For instance, the taxpayer might be sent a notice saying:

“IRS has told me that I owe penalties and interest”

However, the taxpayer may have a good explanation for the delay or error that may justify a request for the penalty to be waived.

CP14 Balance Due Notice

A typical notice that is issued to taxpayers is a CP14 penalty notice. CP14 is typically the initial IRS letter that a person receives when he or she is due a tax balance.

The following may be entered in a CP14 notice:

Taxpayers are not exempt from paying taxes based upon this notice and are expected to take further action to ensure taxes are paid if the notice is not responded to or such action is required.

While looking at a CP14 or any other IRS balance due letter, review:

Other IRS Notices That May Include Penalties

Other notices might be accompanied by penalties such as:

When you get a collections notice from the IRS, it’s crucial to know what you can do before the deadline passes.

Knowing the IRS penalty notice response deadline is crucial, as failing to take action could limit your choices.

Can IRS Penalties Be Removed After Receiving a Notice?

Yes, IRS penalties, of course, can be reduced or eliminated if you meet IRS penalty relief requirements.

The IRS takes a different approach to every situation, depending on a variety of factors, including:

IRS Penalty Abatement vs Penalty Forgiveness

Though people tend to use these words interchangeably, penalty abatement and penalty forgiveness are generally the process of either eliminating or decreasing assessed penalties.

Types of IRS Penalty Relief Available After a Notice

First Time Abate IRS Relief

One of the most popular administrative abatement alternatives that are available to a qualifying taxpayer is the First Time Abate IRS alternative.

Typically, taxpayers will require:

First Time Abate may apply to certain:

First time penalty abatement might be as much as a chance to get rid of penalties without establishing extraordinary conditions for someone with a first-time error.

Reasonable Cause Penalty Relief

The purpose of reasonable cause relief is to provide this relief when a taxpayer can demonstrate that the failure was due to circumstances which were outside the taxpayer’s reasonable control.

The IRS takes the facts and circumstances of each case into account.

Common examples include:

Serious Illness

If a taxpayer is hospitalized during the tax filing season, he or she can explain why the person could not file and/or pay on time.

Death in Family

Unexpected family circumstances can make it difficult for the taxpayer to meet a deadline.

Natural Disaster

Relief may be provided by a flood, hurricane, fire or other disaster, destroying records.

Tax Professional Mistake

Communication to the particulars may be done by a taxpayer who provided incorrect information to a tax preparer and can detail the situation.

A good reasonable cause request will contain the following:

A number of taxpayers prepare a reasonable cause letter for IRS penalty abatement to provide an explanation of the situation.

Administrative Waiver and Other Relief Options

In certain circumstances, individuals could be eligible for:

These options would be contingent on the type of penalty and circumstances.

Step-by-Step Process to Request IRS Penalty Relief After Notice

1: Review Your IRS Notice Carefully

Before requesting relief, review:

The IRS notice explanation is important for determining which strategy for relief to take.

2: Check If You Qualify for Relief

Check for eligibility according to:

Ask:

3: Gather Supporting Documents

A strong documentationcan help to enhance your penalty relief request.

Typical IRS Penalty Relief paperwork consists of:

4: Submit Penalty Abatement Request

Relief can be requested in a number of different ways.

Written Request

A written request should explain:

A well-drafted IRS penalty relief written request is simple, structured and substantiated by facts.

Form 843 Request

Taxpayers can file a request to abate some of the penalties on Form 843.

Typically a Form 843 penalty abatement request will contain:

IRS Penalty Relief by Phone Request

An IRS penalty relief by phone request is a good option for simpler cases, like First Time Abate requests.

Before calling, prepare:

5: Follow Up With IRS

The processing time of the IRS can differ on the basis of the following:

Type of request

How to Write a Reasonable Cause Letter for IRS Penalty Relief

A good reasonable cause letter will contain four parts:

Introduction

Identify:

Explanation

Describe:

Compliance History

Explain:

Request

Clearly ask the IRS to remove penalties.

Documents Needed for IRS Penalty Abatement Request

Prepare:

✔ IRS penalty notice
✔ Tax returns
✔ Payment proof
✔ Bank records
✔ Medical documentation
✔ Disaster evidence
✔ Tax professional communications
Business records (if applicable)

It’s important to maintain proper documentation to show the taxpayer was acting responsibly.

IRS Penalties That May Qualify for Relief

Failure-to-File Penalty

This penalty is imposed if a required tax return is filed after due date.

Possible relief:

Failure-to-Pay Penalty

This is to be applied if taxes are not paid on time.

Depending on the circumstances, taxpayers can be granted relief.

Accuracy-Related Penalty

Accuracy-related penalties may involve:

Taxpayers may be able to get relief if they acted in good faith and with reasonable cause.

Estimated Tax Penalty

Estimated penalty relief is available for some taxpayers as a result of their situation.

Business and Payroll Tax Penalties

Businesses may face penalties related to:

Complete payroll and filing records should be provided to the business in search of IRS penalty relief for business taxes.

What Happens If IRS Denies Your Penalty Relief Request?

If the IRS has denied your request, you might want to consider:

Requesting Review

Add more evidence to support; give more detail.

Appealing IRS Decision

Depending on the issue, taxpayers might have appeal rights.

Seeking Professional Assistance

A tax attorney might be able to review the denial and craft a more effective appeal.

A professional can also assist with other matters like IRS tax penalty relief for tax debt or IRS penalty disputes.

Common Mistakes When Requesting IRS Penalty Relief

Ignoring the IRS Notice

Failure to comply with the notices may lead to:

Sending an Incomplete Explanation

If there are no facts or evidence to support a request, it may be refused.

Paying Without Requesting Relief

Taxpayers will not always be barred from seeking special types of penalty relief when they pay.

Missing IRS Deadlines

Respond to IRS penalty notice within the deadlines.

Can a Tax Attorney Help Remove IRS Penalties?

Professional assistance may be useful when:

An IRS Penalty Relief Program strategy might be prepared by a tax attorney or professional, who can determine eligibility, and interact with the IRS.

IRS Penalty Relief After Notice: Real Example

John received a CP14 notice showing $2,500 in penalties.

His situation:

John created a reasonable cause document, submitted medical documentation and petitioned for abatement of the penalty.

How Long Does IRS Penalty Abatement Take?

The time frames are dependent upon:

Simple requests might be resolved in a shorter period of time, and detailed cases might take longer.

Frequently Asked Questions

Can IRS penalties be removed after a notice?

Yes. Taxpayers can be eligible for First Time Abate, reasonable cause relief etc. from IRS.

How do I request IRS penalty relief?

You can get some relief by calling, writing or by using an IRS form.

What qualifies for IRS penalty relief?

Examples of these include illness, disaster, reasonable cause and good compliance history.

What is First Time Abate IRS relief?

It is an administrative waiver provided by the IRS to qualifying taxpayers that have certain penalties.

Do I need Form 843 for IRS penalty abatement?

Not always. Other IRS processes may be used to answer some requests.

Can I call the IRS to request penalty relief?

If you are a particular taxpayer, you may be able to make a request via the phone.

What if IRS denies my penalty abatement request?

Review, provide further information, or appeal if applicable.

Can a tax lawyer remove IRS penalties?

A tax expert can assist you in assessing options and fill out requests for penalty alleviation.

Conclusion

Don’t despair if you have received a notice from the IRS that includes penalties. There are various ways to seek relief as a taxpayer, such as through First Time Abate, reasonable cause, administrative waiver or IRS error.

The most robust requests are for explanation, documentation and the rules regarding IRS penalties. If you file a written request, call IRS or hire a professional, it’s in your best interest to act fast to ease the situation.

If you are in the midst of IRS penalty relief for tax penalties and tax interest, the first thing to do is to carefully read your notice and select the appropriate method of tax relief.