IRS Penalty Abatement: Reduce or Remove IRS Penalties
Owe more than you can realistically pay the IRS? An Offer in Compromise (OIC) may let you settle your back taxes for less than the full amount. It’s not automatic — but with the right guidance, it can be life-changing.
What Is IRS Penalty Abatement?
Penalty abatement is when the IRS reduces or removes certain penalties. Eligible charges include:
- Failure to file on time
- Failure to pay on time
- Accuracy-related penalties
Types of Penalty Abatement
First-Time Penalty Abatement (FTA)
Available if you:
- Filed all required returns
- Paid or arranged to pay taxes due
- Haven’t had penalties for 3 years prior to requesting abatement
Reasonable Cause Relief
Available if you can prove circumstances beyond your control, such as:
- Serious illness or death in the family
- Natural disaster, fire, or other disturbances
- Inability to obtain records
- IRS error or incorrect written advice
- Undue hardship
- Ignorance of the law
Who Qualifies?
You may qualify if:
- You meet IRS rules for FTA or reasonable cause
- You are current on tax filings
- You have arranged to pay your balance
You won’t qualify if you are still behind on returns or have a history of repeated compliance issues.
Call today before it’s too late.
How to Request Penalty Abatement
Application Steps
- Review your IRS penalty notice
- Call the IRS (FTA requests may be handled by phone)
- Submit Form 843 for written requests
- Provide documentation for reasonable cause (medical records, insurance claims, etc.)
- Wait for IRS review and decision
Even if penalties are removed, interest generally continues until the balance is paid.
Benefits of Penalty Relief
- Reduce your balance owed
- Stop penalties from growing
- Resolve your tax debt faster
- Relieve stress and protect income
Risks and Considerations
- Interest continues until tax is paid
- Proof is required for reasonable cause
- Relief is not guaranteed — IRS decides on a case-by-case basis
Why Work With Omni Tax Help
Many penalty abatement requests fail due to incomplete forms or insufficient explanations. Omni’s Tax Analysts can:
- Review your eligibility
- File your request correctly
- Gather supporting documents
- Negotiate with the IRS
- Explore alternatives if denied
IRS Penalty Abatement FAQs
Yes. The IRS offers relief through FTA or reasonable cause.
Yes — the First-Time Penalty Abatement program.
Form 843 (Claim for Refund and Request for Abatement).
No. Interest continues until the balance is paid in full.
Yes. You can appeal to the IRS Office of Appeals.