IRS Penalty Abatement: How to Get IRS Penalties Removed
IRS penalties can add 20–25% to your tax balance. The good news: the IRS has formal programs to remove penalties, and many taxpayers qualify without even knowing it. Penalty abatement can save thousands.
Types of IRS Penalties That Can Be Abated
The most common penalties subject to abatement include: failure-to-file (5% per month, max 25%), failure-to-pay (0.5% per month, max 25%), failure-to-deposit (employment taxes), and accuracy-related penalties (20–40% of underpayment). Fraud penalties (75%) are not abatable through standard programs.
First-Time Penalty Abatement (FTA)
The FTA program allows the IRS to waive penalties for taxpayers who have a clean compliance history — meaning no penalties in the three prior tax years. You must also be current on all filing and payment requirements. FTA can be requested by phone and is often granted on the spot for failure-to-file and failure-to-pay penalties.
Reasonable Cause Penalty Abatement
If you cannot qualify for FTA, you may still qualify for penalty abatement by demonstrating reasonable cause — that you exercised ordinary care and prudence but were unable to comply due to circumstances beyond your control. Qualifying reasons include: serious illness or death of a close family member, natural disaster, fire, theft, reliance on incorrect professional advice, or postal service delays.
How to Request Penalty Abatement
For FTA, call the IRS directly at 1-800-829-1040 and request the penalty abatement by phone. For reasonable cause, submit a written request (or Form 843) explaining the circumstances with supporting documentation. Include specific dates, names, and documents to support your case. Vague or unsupported requests are routinely denied.
Systemic Abatement and Disaster Relief
The IRS also provides systemic abatement for large-scale events, such as federally declared disasters. Taxpayers in designated disaster areas automatically receive filing and payment extensions and penalty relief. Check IRS.gov for current disaster relief announcements.
Real-World Example
A restaurant owner in Burbank had a perfect compliance record for 12 years before a health emergency resulted in unfiled returns for 2020 and 2021. By the time she caught up, she owed $8,400 in penalties alone. We requested FTA for 2020 (granted immediately by phone, $3,800 removed) and submitted a reasonable cause request for 2021 citing documented medical records ($3,200 removed). Her out-of-pocket penalty cost dropped to $1,400.
Penalty Abatement Help in Burbank
Calculus Tax, Inc. has successfully removed IRS penalties for taxpayers in Burbank, Los Angeles, and throughout LA County. Call (310) 598-3759 or visit 1050 W. Alameda Ave., Burbank, CA 91506.
Frequently Asked Questions
How many times can I use First-Time Penalty Abatement?
Once. The FTA is available one time, and once used, it resets your clean compliance clock. You must maintain three clean years before being eligible again.
Can I request penalty abatement if I still owe taxes?
Yes. You do not need to pay your balance in full before requesting penalty abatement. However, you must be current on all filing requirements.
Will the IRS automatically apply penalty abatement?
No. You must proactively request it. The IRS does not automatically apply FTA or reasonable cause abatement — you must ask.
Can penalties be abated after being paid?
Yes. If you paid penalties that qualify for abatement, you can request a refund using Form 843 within 2 years of the payment date.
What if the IRS denies my penalty abatement request?
You can appeal the denial through the IRS Office of Appeals. A well-documented reasonable cause request rarely gets upheld on appeal if the original denial was for technical reasons.
Does penalty abatement affect my interest?
The IRS does not abate interest except in cases of IRS error. Interest is charged on the underlying tax and on penalties, so reducing penalties indirectly reduces total interest owed.
IRS Penalty Abatement: How to Get IRS Penalties Removed Services in Los Angeles
Calculus Tax, Inc. provides irs penalty abatement: how to get irs penalties removed services to individuals and businesses throughout Los Angeles County. Our licensed CPAs are based in Burbank and serve clients in Burbank and surrounding communities.
Our Burbank office serves clients throughout Los Angeles County including Los Angeles, Long Beach, Santa Monica, Glendale, Burbank, and more.
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