What is a Penalty Abatement?

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A penalty abatement, or first-time abatement (FTA), is a penalty waiver that some but probably not as many taxpayers have taken advantage of in the past. The waiver was first introduced in 2001, though still remains largely unknown.

The IRS inflicts different penalties for non-compliant taxpayers, and those fees can make it very difficult to get back on good terms with the IRS.

Requirements for Consideration

An FTA can help you get back on track, but there are certain restrictions. In order to quality for a tax abatement:

How to make a request?

The first step is to decide what type of request you are submitting. The list includes:

Submitting a Request

One criticism with an FTA is not only are many taxpayers unaware of it, but the reported computer software the IRS uses is inconsistent. However, it does not mean that you should avoid trying.

It has been proven through persistence that a taxpayer can get penalty relief. The odds are further enhanced by working with a tax resolution specialist to assist in filing the request.

Tax professionals can advise you on if you qualify, which type of defense is the best, how to file as well as continue pestering the IRS about the matter. The good news with an FTA is the initial determination is reversible, so just because you failed to qualify once doesn’t mean you shouldn’t try again.

If you already paid the penalties yet did not realize about the FTA and want to see if you still qualify, it is possible to request a refund. The IRS will consider your situation like the other cases. The claim is made through Form 843. However, you only have three years to make the request of the return date or filing date, or two years after the penalty was paid.

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