Ways To Get a Penalty Removed
The right penalty relief depends on your history and what made you late. Relief can cover many penalties, including failure-to-file, failure-to-pay and accuracy-related penalties. Estimated tax penalties follow separate rules. First-time abatement doesn’t cover them, and reasonable cause relief doesn’t apply to them. If you have one, see the IRS page on the underpayment of estimated tax by individuals penalty or follow the instructions on your notice.
| Type of relief | Who it’s for | Do you need to ask? |
|---|---|---|
| First Time Abate (FTA) | You filed and paid on time for the prior three years | Yes, by phone or in writing |
| Automatic Exemption from Penalty (AEP) | Same three-year record, for 2025 tax year returns and later | No, the penalty is never assessed |
| Reasonable cause | Something beyond your control made you late | Yes, with supporting documents |
| Statutory exception | Situations the tax law itself excuses | Yes, follow your notice instructions |
“Assessed” means the IRS officially charges the penalty to your account. Relief matters because late penalties add up: failure to file costs 5% of unpaid tax per month, up to 25%.
Who Qualifies for First-Time Abatement
First-Time Abatement Rules
You likely qualify for first-time abatement if both of these are true:
- You filed the same type of return on time for the prior three years.
- You had no penalties in those years, other than an estimated tax penalty or one removed for reasonable cause or IRS error.
FTA covers failure-to-file, failure-to-pay and failure-to-deposit penalties, regardless of amount. You must contact the IRS to request it, but you don’t need to name FTA or send documents.
How Automatic Exemption Changes Things
The IRS is replacing FTA with Automatic Exemption from Penalty (AEP) for 2025 tax year returns and later, including Form 1040. AEP covers the same three penalties as FTA: failure-to-file, failure-to-pay and failure-to-deposit. If you meet the same three-year record, the penalty is never assessed. You don’t need to act, and you’ll get a letter explaining that the penalty wasn’t assessed.
Under AEP, the failure-to-pay penalty doesn’t build up. Under FTA, the penalty is assessed first and removed later, so it may keep growing until you pay the tax. Either way, you still owe the unpaid tax and interest.
FTA still applies to earlier years and to some recent returns AEP doesn’t cover. If you get a notice showing a penalty and think you should have qualified for AEP, call the number on the notice.
What Counts as Reasonable Cause
If you don’t qualify for FTA, you can ask for reasonable cause relief. The IRS decides case by case whether you acted with reasonable cause and good faith. It doesn’t apply to some penalties, such as the estimated tax penalty.
Reasons That May Qualify
- Fires, natural disasters or civil disturbances
- Being unable to get your records
- Death, serious illness or unavoidable absence of you or an immediate family member
- System issues that delayed your e-filing or payment
Reasons That Usually Don’t Qualify
- Relying on a tax professional
- Not knowing the rules
- Mistakes and oversights
- Lack of money, by itself
How To Request Penalty Abatement
- Read your notice and confirm it’s correct. If it’s wrong, follow the notice instructions.
- Call the toll-free number on your notice. Have the notice in hand and be ready to explain why you were late.
- If your request isn’t approved by phone, ask in writing with Form 843, Claim for Refund and Request for Abatement.
- If the IRS denies your request, you can appeal.
For reasonable cause, keep supporting documents ready before you call. If you need help, a Low Income Taxpayer Clinic or the Taxpayer Advocate Service may be able to assist.
What Happens to Interest
The IRS charges interest on penalties. If a penalty is reduced or removed, the IRS automatically reduces or removes the related interest.
You still owe interest on any unpaid tax, though. If you can’t pay in full, pay what you can and apply for an IRS payment plan to reduce future penalties.
