First-Time Penalty Abatement: The Easiest IRS Penalty Relief You Never Used
Most tax professionals agree: First-Time Penalty Abatement is the most underused IRS relief tool available. Qualifying taxpayers can have failure-to-file and failure-to-pay penalties removed with a single phone call — no documentation required.
What Is First-Time Penalty Abatement?
FTA is an administrative waiver that allows the IRS to remove certain penalties for taxpayers who have a clean compliance history. It was introduced as part of the IRS's effort to reward good compliance behavior and is available for failure-to-file, failure-to-pay, and failure-to-deposit penalties.
Eligibility Requirements
To qualify for FTA, you must: have no penalties in the three prior tax years for the same type of return, have filed (or filed valid extensions for) all required returns, and have paid (or arranged to pay) any tax currently owed. The prior-year penalty test looks at penalties assessed — not just the ones you may have had removed.
How to Request FTA
Call the IRS at 1-800-829-1040 and tell the representative you are calling to request First-Time Penalty Abatement. Have your tax identification number, the tax year, and the notice number ready. The representative will check your account history and, if you qualify, grant the abatement over the phone. It typically takes less than 30 minutes.
Requesting FTA in Writing
You can also submit FTA in writing using Form 843 or a letter. Written requests are useful when the phone line is backed up or when you want a paper trail. Include the tax year, penalty amount, and statement that you are requesting FTA based on a clean compliance record.
FTA vs. Reasonable Cause Abatement
FTA is faster, easier, and requires no documentation. Reasonable cause requires a written explanation and supporting evidence. Use FTA first if you qualify — you can still pursue reasonable cause for additional years or additional penalty types. If the IRS denies FTA, ask for the denial in writing before submitting a reasonable cause request.
Real-World Example
An accountant in Pasadena late-filed his own 2022 return due to a family illness and owed $2,200 in failure-to-file and failure-to-pay penalties. He had a perfect filing history for the prior decade. We called the IRS on his behalf, requested FTA, and had the full $2,200 in penalties removed within 20 minutes.
Penalty Abatement Help in Pasadena and LA
If you have IRS penalties, Calculus Tax, Inc. evaluates your eligibility for FTA and reasonable cause abatement. Serving Pasadena, Los Angeles, Burbank, and all of LA County. Call (213) 468-6170 or visit 1050 W. Alameda Ave., Burbank, CA 91506.
Frequently Asked Questions
Can FTA remove penalties from multiple years?
FTA only applies to one tax year — typically the first year you had a penalty. For subsequent years, you would need to request reasonable cause abatement separately.
Does FTA work for payroll tax penalties?
Yes. FTA applies to failure-to-deposit penalties for employment taxes, in addition to failure-to-file and failure-to-pay penalties for income taxes.
Can I use FTA if I have a payment plan?
Yes, as long as you are current on your installment agreement and have filed all required returns, you can still qualify for FTA.
Is there a dollar limit on FTA?
No. FTA can remove any amount of qualifying penalties, regardless of how large they are.
What if the IRS rep says I do not qualify for FTA?
Ask them to review your account for the three prior years specifically. Sometimes representatives check the wrong years or miss a compliance record. If you believe you qualify and the rep disagrees, escalate to a supervisor or submit a written FTA request.
Can FTA be used if I have an OIC pending?
Yes. An OIC is pending and FTA are separate processes. Reducing penalties through FTA before an OIC acceptance actually reduces the total liability the IRS is being asked to settle.
What can change the answer
Notice type, issue date, filing history, account status, deadlines, and current agency procedures can change the available next step. Bring the complete notice and account records to a qualified review.
Tax rules and collection procedures can change and depend on the account. Federal claims should be checked against current IRS guidance; California claims should be checked against the California Franchise Tax Board. See our editorial methodology for sourcing and update standards.
When professional help may make sense
Calculus Tax, Inc. can review notices, organize financial information, explain available paths, and communicate with the IRS or California agencies when representation is appropriate. The right next step depends on your facts, deadlines, filing history, and ability to pay.
We are based in Burbank and serve clients in Pasadena and throughout Los Angeles County. See our local service-area pages for location-specific information.
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