According to a report by the Treasury Inspector General for Tax Administration (TIGTA), 1.45 million taxpayers were not informed that they qualified for penalty relief under the First-Time Abatement Relief program. TIGTA estimated that the amount of penalties left unabated totaled more than $181 million.
What is the First-Time Abatement Relief Program?
First-Time Abatement Relief is provided to taxpayers that are penalized for failing to file a return or failing to pay taxes owed. The purpose of the program is to provide relief to taxpayers that are normally compliant with filing and paying their taxes on time. To qualify for the program, the taxpayer must have properly filed and paid their taxes for the prior three years. For example, in 2010 a taxpayer failed to file his or her tax return. When the return was filed in 2013, the IRS assessed additional penalties and interest on taxes owed due to failure to file and failure to pay the taxes on time. The taxpayer may qualify for First-Time Abatement Relief if he or she properly filed and paid their 2007, 2008, and 2009 taxes. The interest cannot be abated. For more information on failure to file and failure pay penalties, click here.
Click Here for a detailed example on qualifying for First Time Abatement Relief.
How to Request First-Time Abatement Relief
If you believe you qualify for First-Time Abatement Relief, you have options. First, I recommend you write a letter to the IRS. Generally, the letter should be sent to the following address:
Penalty Abatement Coordinator
Department of Treasury
Internal Revenue Service
Cincinnati, OH 45999-0149
In the letter, your name, social security number, tax form, and tax year should be listed at the beginning of the letter. The tax form for individual tax returns is Form 1040. The IRS should review your account to see if you qualify for First-Time Abatement Relief. If this does not work, then your second option is to call the Taxpayer Advocate. The Taxpayer Advocate will attempt to resolve your request for First-Time Abatement Relief with the IRS.
If you need assistance on getting tax penalty abatement relief, we can assist you further, call ALG Tax Solutions 855-MI-Tax-Help (855-648-2943) or provide your contact information online.
IRS Circular 230 Disclosure: To the extent this writing contains advice on a federal tax issue, the advice is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed in this communication.