Can I Get IRS Penalties Removed?
Often, yes. The IRS can remove penalties through First-Time Abatement if you have a clean compliance history for the past three years, or through reasonable-cause relief if events outside your control, such as serious illness, a disaster, or loss of records, kept you from filing or paying on time. When a penalty is removed, the interest charged on that penalty is removed too.
Common IRS penalties
| Penalty | How it is charged |
|---|---|
| Failure to file | 5% of unpaid tax per month, up to 25% |
| Failure to pay | 0.5% of unpaid tax per month, up to 25% |
| Failure to deposit (payroll) | 2% to 15%, depending on how late the deposit is |
| Estimated tax penalty | Calculated like interest on underpaid estimates |
Swipe sideways to see the full table →
Option 1: First-Time Abatement (FTA)
FTA is an administrative waiver. You may qualify if:
- You had no significant penalties in the three prior tax years.
- You have filed all currently required returns, or have a valid extension.
- You have paid, or arranged to pay, the tax owed.
FTA applies to failure-to-file, failure-to-pay and failure-to-deposit penalties. It usually does not apply to the estimated tax penalty.
Option 2: Reasonable cause
If you do not qualify for FTA, or penalties span several years, reasonable-cause relief may apply. The IRS looks at whether you used ordinary care and still could not comply. Common reasons include:
- Serious illness, or death in the immediate family.
- Fire, natural disaster or other casualty.
- Inability to get records despite reasonable efforts.
- Reliance on incorrect written advice from the IRS.
Strong requests include dates, documents and a clear timeline showing how the event affected compliance.
How penalty relief is requested
- By phone for simple FTA cases.
- In writing or using Form 843, Claim for Refund and Request for Abatement.
- Through IRS Appeals if the first request is denied.
Why it matters before choosing a payment option
Penalties can be a large part of the balance. Reducing them first can lower monthly payments, shorten a payment plan, or change which resolution option makes sense. Payroll businesses with late or unfiled returns often have the largest penalty balances.
How we help
We review your IRS transcripts year by year, identify which penalties qualify, choose the right relief type for each year, and prepare a documented request.
Talk to a CPA or Enrolled Agent
Every situation is different. We review your IRS transcripts and explain your options in plain terms.
This page provides general information, not tax or legal advice for your specific situation. IRS rules, fees and thresholds can change. Past results do not guarantee a similar outcome, and every case depends on its own facts. Franskoviak Tax Solutions, operated by Titan Tax Solutions, P.C., provides representation where permitted.
