First-Time IRS Penalty Abatements
Tax issues are complex, but professionals from Hutton Tax Solutions offer assistance. If you have First Time Abatement IRS questions, call us for that and more.
What Are First-Time IRS Penalty Abatements?
The Internal Revenue Service (IRS) established the First-Time Penalty Abatement (FTA) policy in 2001 to relieve taxpayers. Under this program, taxpayers are relieved of their failure to pay penalties, failure to file penalties, and/or failure to deposit penalties if certain conditions are met on the account.
Under certain circumstances, it is possible to get first-time relief on penalties immediately.
Contact an IRS Tax Attorney to discuss your options for relief.
Qualifying for an IRS First-Time Penalty Abatement
Applicants for penalty relief under administrative waivers, including First-Time Abatements, must meet certain criteria before reasonable causes can be considered.
Generally, to qualify, you must meet the following requirements:
Past Compliance
You are considered compliant under the following circumstances:
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If the returns for the three years before the penalty year have been filed
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You did not receive any penalties during the three years prior to the penalty year.
Example: You’re requesting a First-Time Abatement for failure-to-file penalties on your 2021 tax return. You don’t have any unresolved penalties on tax returns for 2018, 2019, and 2020 and did not receive First-Time Abatement Relief for any of these years.
Current Compliance
You are considered compliant if you:
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Have filed all required returns or have a valid extension to file in place
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You have paid, or you have a valid payment plan to pay in place for all taxes due
Example: You request a First-Time Abatement for penalties on your 2021 tax return. You have filed all required returns and do not owe any taxes except the 2021 return.
Applying for an IRS First-Time Penalty Abatement
IRS FTAs can be requested by phone or in writing.
- Request by phone: You must contact the IRS and request this abatement with IRS personnel. Assistance from an experienced tax attorney will be of great help to accomplish this appropriately.
- Request by mail: Submission of Form 843 – Request for Abatement is another option. In this form, you include all your information and clearly explain that you’ve met all criteria for an FTA.
IRS First-Time Penalty Abatement Form
To receive a refund or request penalty abatement of certain taxes, fees, and interests, use IRS Form 843. Translation of this form can prove challenging to understand at times. Therefore it’s essential to seek IRS help from tax professionals for better understanding.
The Internal Revenue Service (IRS) provides information about this form in various formats to make this information accessible to every taxpayer.
The IRS First-Time Penalty Abatement Form is used when you cannot request penalty relief over the phone. It is essential that you approach tax practitioners to write this letter on your behalf.
Your tax lien attorney will include all your relevant information and indicate why you meet the criteria for the first-time abatement.
IRS First Time Penalty Abatement Form 843 Helpful Tips
The IRS Form 843 is available on the IRS website at IRS.gov. When writing to the IRS to request a First-Time Penalty Abatement be sure to mail your completed form to the address as written on your tax penalty notice.
Be sure to complete the identifying information (name, address, Social Security number) as it appears on your most recent tax return. Also, make sure that your letter includes the following information:
(1) Period: Include the tax year for which you are requesting the abatement. Remember, you must complete a separate form for each tax period or fee year.
(2) Amount to be refunded or abated: Total the penalties for the applicable tax period and enter the amount here.
(3) Type of tax or fee: Select the type of tax return for which you received the penalty. For example, if this is for your personal income tax return, select “income.”
(4) Type of penalty: This information can be found on your penalty notice. The Internal Revenue Code section will outline the basis for the penalty you received.
(5a) Interest, penalties, and additions to tax: Select the applicable reason for your request. If you’re requesting the abatement under the provisions of the First-Time Abatement, select “Reasonable Cause or other reason allowed under the law.”
(5b) Date of payments: As a reminder, you must have paid the tax or have set up payments towards this period before qualifying for a First-Time Abatement. Include information regarding these payments in this section.
(6) Original return: Select the type of fee or return you received the penalty for.
(7) Explanation: Clearly indicate why you have met the provisions of the First-Time Abatement program.
Remember to sign and date this form. Your spouse must also sign and date this request if the return is a joint one.
Also, remember to include copies of any documents that support your claim.
In order to ensure everything is done correctly, contact the IRS audit lawyer at our law firm as soon as possible.
Where to Mail a Letter to the IRS for a First-Time Abatement
You mail an FTA form to the IRS Penalty Abatement Coordinator at the address listed in your notice. Be sure to mail copies of your documents instead of originals to avoid losing them.
How Often Can You Request a First-Time Penalty Abatement From the IRS?
A taxpayer may only claim one FTA per qualifying tax period for late filing penalties, failure to file, failure to pay, or failure to deposit penalty abatements. Other abatement options under Reasonable Cause relief may be available for the remaining tax periods with penalties.
How Long Does an IRS Abatement Take?
The IRS processes these requests on a first-come-first-serve basis, so wait times will vary.
The IRS will send you a letter outlining any changes or removal of penalties from your account.
To ensure prompt and accurate results, seek tax advice from our Oklahoma tax attorney.