First Time IRS Tax Penalty Abatement

What Is First-Time IRS Tax Penalty Abatement?

First-Time IRS Tax Penalty Abatement is the opportunity for typically compliant taxpayers (individual or business) to request reduction or removal of certain tax penalties that the IRS has charged them for the first time. For example, if you have paid and filed your taxes for the past three years, but recently, you had some financial issues and the IRS charged you IRS tax penalties, you can request First-Time IRS Tax Penalty Abatement.

This type of IRS Tax Penalty Relief is for individuals that have filed and paid their taxes on time for the past three years. You can request First-Time IRS Tax Penalty Abatement for most penalties, including S-Corporation IRS tax penalties, 1040 IRS tax penalties, C-Corporation IRS tax penalties, and Payroll IRS tax penalties.

Unfortunately, many taxpayers are unaware of this opportunity to request relief of tax penalties. Even for those who are aware of the existence of First-Time IRS Tax Penalty Abatement, it can be difficult to understand how First-Time IRS Tax Penalty Abatement works or how to request it.

If you have been diligent with your taxes for years but made one mistake, then we recommend filing for First-Time IRS Tax Penalty Abatement. This will provide you some tax relief. We do not recommend requesting First-Time IRS Tax Penalty Abatement if you are in a hardship situation. For hardship, request an IRS Tax Settlement.

First-Time IRS Tax Penalty Relief – Example

You owe four years of taxes. You may qualify for First-Time IRS Tax Penalty Abatement for the first year you owe back taxes. You must show that you filed and paid your taxes on time for the previous three years.

2011: Filed and paid taxes on time
2012: Filed and paid taxes on time
2013: Filed and paid taxes on time
2014: Owe $15,000 of taxes, including $3,500 of IRS Tax Penalties
2015: Owe $10,000 of taxes, including $2,500 of IRS Tax Penalties
2016: Owe $25,000 of taxes, including $5,000 of IRS Tax Penalties
2017: Owe $2,000 of taxes, including $750 of IRS Tax Penalties

Taxes for 2011 through 2013 were filed and paid on time. The IRS should grant First-Time IRS Tax Penalty Relief for 2014 only. The IRS will remove the $3,500 IRS Tax Penalty charged for 2014.

The IRS will not grant IRS Tax Penalty Relief for tax years 2015, 2016, and 2017 under the First-Time IRS Tax Penalty Abatement program. You must show reasonable cause to qualify for IRS tax penalty relief the other tax years.

Three Ways to Request IRS First-Time Penalty Abatement

1) Prepare and mail a letter
2) Prepare and file Form 843, Claim for Refund and Request for Abatement
3) 3. Request First-Time Penalty Abatement over the phone with the IRS

There are three methods for requesting First-Time Penalty Abatement – by mail, with Form 843, and by phone. Each of these avenues requires 5 steps to request and find out if your request for abatement has been approved or denied. To make this process easy for you, ALG Tax Solutions has developed the comprehensive First-Time IRS Tax Penalty Abatement eBook below. Within the eBook, you will find a step-by-step guide for how you can request penalty relief to save thousands of dollars in tax penalty relief. Just fill out the form below to download your FREE First-Time IRS Tax Penalty Abatement eBook.