Penalty Abatement


Introduced only 12 years ago, the first-time abatement penalty waiver (FTA) can be used by qualifying taxpayers for failure-to-pay, failure-to-file, or failure-to-deposit penalties. It can only be used for a single tax period and the taxpayer cannot have other penalties currently on their record. Specifically, the taxpayer cannot owe any significant amount of penalties on a similar tax return within the last three years. In addition, the taxpayer must be in compliance with all filing and payment requirements.

The IRS uses special software known as the Reasonable Cause Assistant (RCA) to determine if you’re eligible to receive an FTA. The IRS has garnered a reputation for inaccurately determining eligibility and then not going back and correcting these incorrect assumptions. For this reason, many experts believe its prudent to work with a professional organization that can assist you in proving your case.


Many taxpayers view the penalties and fees as being unjust or even outrageous and so the Penalty Abatement program was instituted to try and give taxpayers some type of break. The program can be used for individuals or businesses that have been assessed certain penalties. If successful, you may be able to avoid hundreds or thousands of dollars worth of fees and penalties.

According to a report by the Treasury Inspector General, many taxpayers and even tax professionals are not aware of this program. This means that many people pay fees that they could be forgiven if only they would file and get the abatement. The report goes on to state that about 74% of the penalties do qualify for the FTA program if taxpayers simply knew about the program and would file the right paperwork.


If you would like to request relief from failure-to-file, failure-to-pay, and failure-to-deposit penalties, there are several ways to do so. A penalty non-assertion request can be filed before penalties are even assessed. This can be done by submitting the correct form, calling or writing the IRS. Once the penalty has been assessed, a taxpayer can request penalty abatement. This can be done in writing or by calling the IRS. It can be very helpful to work with a tax professional when requesting abatement. This can ensure that all forms are filled out correctly and that every qualification has been met.


Only certain types of penalties are eligible for relief. For instance, gift tax returns and estate returns do not qualify. The program is available for businesses, though, including partnerships and S corporations. Most individual tax returns will qualify for the program.


Though working with a pro can cost a little, it does increase your chances considerably of being approved. An expert can answer questions, check to make sure you qualify and work with you throughout the process for a better outcome. The Tax Resolvers has the expertise to assist taxpayers with the FTA program. We offer ethical and honest services to individuals and business owners. You can enjoy peace of mind knowing that professionals are working for your good. Please contact The Tax Resolvers if you’d like to learn more about how the FTA program can save you hundreds or thousands of dollars.



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