IRS penalty abatement: which relief fits and how to ask for it
Educational information only, not tax, legal, or financial advice. We are not a CPA, enrolled agent, attorney, or the IRS. Talk to your own tax professional about your situation.
Short answer: The IRS can remove or reduce some penalties, including failure-to-file and failure-to-pay penalties, through three kinds of relief: first-time abate and other administrative waivers, reasonable cause, and statutory exceptions (IRS: penalty relief). You can often ask by calling the number on your notice, and if the IRS can’t approve relief over the phone, you can ask in writing with Form 843 (IRS: penalty relief). When a penalty is reduced or removed, the IRS automatically reduces the related interest, but it doesn’t remove or reduce interest for reasonable cause or as first-time relief (IRS: interest).
This page explains the process. It doesn’t promise any IRS result; the IRS decides each request based on your own account and facts.
Before you ask for relief, check that the notice is right. The IRS says that if you can resolve the issue in your notice, a penalty may not apply (IRS: penalties). If you haven’t read the whole bill yet, start with what to do first after an IRS balance-due notice.
First, name the penalty on your notice
Notices often show tax, penalties and interest together. Write each one down as a separate amount, then find your penalty below. Every figure here is from the IRS page linked beside it, as checked on October 7, 2026 and checked again on October 19, 2026.
| Penalty | How the IRS figures it | Relief the IRS lists for it |
|---|---|---|
| Failure to file | 5% of the unpaid tax for each month or partial month the return is late, up to 25%. For a Form 1040 due (without extension) after December 31, 2025 that is more than 60 days late, the minimum is $525 or 100% of the underpayment, whichever is less (failure to file penalty). Partnership (Forms 1065/1066/8985) and S corporation (Form 1120-S) late returns use a different calculation: a base rate per partner or shareholder per month for up to 12 months; for returns due after December 31, 2025 the base rate is $255 (failure to file penalty). | First-time abate, or the new automatic exemption for 2025 and later returns (administrative relief). Reasonable cause. A statutory exception such as a return mailed on time (statutory exceptions). |
| Failure to pay | 0.5% of the unpaid tax for each month or part of a month it stays unpaid, up to 25%. It drops to 0.25% a month during an approved payment plan if you filed on time as an individual, and rises to 1% a month if you don’t pay within 10 days after a notice of intent to levy. Full monthly charges apply even if you pay before the month ends (failure to pay penalty). | First-time abate or the automatic exemption (administrative relief). Reasonable cause, though lack of funds by itself isn’t reasonable cause (reasonable cause). |
| Both in the same month | The failure-to-file penalty is reduced by the failure-to-pay penalty, for example 4.5% plus 0.5% instead of 5% (failure to pay penalty). After 5 months the failure-to-file penalty maxes out, but the failure-to-pay penalty continues (failure to file penalty). | As above, for each penalty separately. |
| Underpayment of estimated tax (individuals) | Based on the amount of the underpayment, the period it was due and underpaid, and the IRS’s published quarterly interest rates for underpayments (estimated tax penalty). | Generally can’t be waived for reasonable cause. It may be removed or reduced for a casualty, disaster or other unusual circumstance, and may be reduced if you or your spouse retired in the past 2 years after reaching age 62 or became disabled and had reasonable cause, if most of your withholding came early in the year, or if your income varied (Form 2210) (estimated tax penalty). |
| Accuracy-related | Applies when you don’t claim all your income, or claim deductions or credits you don’t qualify for (IRS: penalties). | Reasonable cause and good faith. The IRS looks at your efforts to report the correct tax, how complex the issue was, your knowledge of tax law and the steps you took to get help (reasonable cause). |
| Failure to deposit (employers) | Applies when employment taxes aren’t paid accurately or on time (IRS: penalties). | First-time abate or the automatic exemption, with extra conditions for businesses (administrative relief). |
If your penalty came from late or unfiled returns, getting every return filed first matters more than anything on this page; see unfiled tax returns: how to catch up, one year at a time. Self-employed people who owe the estimated tax penalty can separate business and household figures with Self-employed and owe the IRS: sort your records, then your options.
The three kinds of relief
First-time abate
First-time abate is the most common administrative waiver. It applies to failure-to-file, failure-to-pay and failure-to-deposit penalties, regardless of amount, if you have a timely compliance history: the same type of return was filed on time for the prior three years (or 12 consecutive quarters), and no penalty was assessed in that time other than an estimated tax penalty, or one that was assessed was later removed for reasonable cause or IRS error (IRS: administrative relief).
You have to contact the IRS to get it, but you don’t need to name first-time abate or send supporting documents; the IRS reviews your account to see whether you meet the requirements (IRS: administrative relief). If you ask for reasonable cause and the IRS finds you qualify for first-time abate, it applies first-time abate instead (IRS: reasonable cause).
New in 2026: the Automatic Exemption from Penalty
The IRS says first-time abate is transitioning to a new Automatic Exemption from Penalty (AEP), starting summer 2026. Under AEP, if you file or pay late but filed returns on time and paid the tax due for the three prior years (or 12 consecutive quarters), the failure-to-file, failure-to-pay or failure-to-deposit penalty isn’t assessed at all, and you get a letter saying so. You don’t need to contact the IRS or respond to that letter (IRS: administrative relief). This is the IRS’s own comparison:
| Question | First-time abate | Automatic Exemption from Penalty |
|---|---|---|
| Which returns | All years and periods before AEP, plus eligible 2025 and 2026 returns not considered for AEP | 2025 tax year returns, 2026 quarterly returns, and all later years and quarters |
| Is it automatic? | No. You contact the IRS to request it. | Yes. No action needed from you. |
| Is the penalty assessed? | Yes, then removed | No penalty is assessed |
| Failure-to-pay penalty | May keep accruing until the tax is fully paid | Doesn’t accrue and isn’t assessed on the unpaid tax |
AEP covers Forms 1040, 1065 and 1120, Forms 940, 941, 943, 944 and 945 and Form CT-1. You still owe the unpaid tax, the interest and any penalty AEP doesn’t cover. If you get a notice showing an assessed penalty but believe you should have qualified, the IRS says to contact it (IRS: administrative relief).
Business taxpayers have two extra rules for the failure-to-deposit penalty: the IRS must not have waived that penalty four or more times in the prior three years (or 12 consecutive quarters), and the penalty must not have been charged for Electronic Federal Tax Payment System (EFTPS) avoidance (IRS: administrative relief).
First-time abate and the automatic exemption do not cover returns filed once or infrequently (event-based filing), the Daily Delinquency Penalty, or information reporting that depends on another filing (IRS: administrative relief).
Other administrative relief the IRS sometimes announces
Besides first-time abate and the automatic exemption, the IRS sometimes grants administrative relief for specific returns and tax periods through policy statements, news releases, notices or other formal communications. When that happens, the IRS says you may already be eligible and don’t need to take any action (IRS: administrative relief). That is separate from asking for first-time abate or reasonable cause on your own notice.
Reasonable cause
Reasonable cause is decided case by case. For failure-to-file and failure-to-pay penalties, you need to show you used ordinary care and prudence and still couldn’t file or pay on time. The IRS gives these examples of reasons that may qualify (IRS: reasonable cause):
- Fires, natural disasters or civil disturbances
- Inability to get records
- Death, serious illness or unavoidable absence of the taxpayer or immediate family
- System issues that delayed a timely electronic filing or payment
The IRS says these generally don’t qualify on their own: relying on a tax professional, not knowing the rules, mistakes and oversights, and lack of funds. Even when money was short, you may still qualify based on other facts that show you used reasonable care and tried to comply (IRS: reasonable cause). Reasonable cause doesn’t apply to some penalties, such as the estimated tax penalty (IRS: reasonable cause).
Statutory exceptions
The tax law itself carves out some cases (IRS: statutory exceptions):
- Incorrect written IRS advice. You asked the IRS a question in writing, it answered in writing, the answer was wrong and you relied on it. You’ll need a copy of that advice, an explanation of how you relied on it and the notice showing the penalty.
- Mailed on time. A paper return or payment counts as on time if it was mailed in the United States by the deadline, correctly addressed, with proper postage, through the U.S. Postal Service or a designated private delivery service. A timely, processable e-filed return that was rejected counts as on time if you re-sent or mailed it within 10 days of the rejection notice.
- Federal disaster areas and combat zones. If you were affected by a federal disaster or served in a combat zone, you may be eligible for relief.
How to ask for penalty relief
- Follow your notice. The IRS says to follow the instructions in the notice you received. If it gives instructions or deadlines for disputing a penalty, you must follow them (IRS: penalties).
- Try the phone first. Some requests can be approved over the phone. Call the toll-free number on your notice and have three things ready: the notice, the penalty you want removed and your reasons. The IRS tells you during the call whether relief is approved (IRS: penalty relief). Our guide to What to have ready before an IRS phone call (and how to spot a scam) helps you set up for it.
- If the phone doesn’t work, write. Use Form 843, Claim for Refund and Request for Abatement (IRS: penalty relief), which is used to claim a refund or ask for abatement of certain taxes, interest, penalties, fees and additions to tax (About Form 843). For first-time abate, a written statement sent to the address in the Form 843 instructions also works (IRS: administrative relief).
- For reasonable cause, give dates and proof. Explain what happened and when, how it kept you from filing or paying on time, and what you tried to do. Include documents such as hospital or court records or a doctor’s letter with start and end dates, records of a disaster, copies of relevant letters, and receipts (IRS: reasonable cause). Our Tax debt documents: what to gather, and how to replace what's missing helps you pull these together.
- For the estimated tax penalty, use the waiver route. Send a written explanation, signed under penalty of perjury, to the address on your notice, or complete Form 2210 if your withholding came early in the year or your income varied (IRS: estimated tax penalty).
- If you’re turned down, check your appeal deadline. You generally have 30 days from the date of the rejection letter to ask for an appeal with the IRS Independent Office of Appeals; your letter gives the exact deadline. Appeals is open when the IRS assessed a failure-to-file or failure-to-pay penalty, you asked in writing to remove it, and you got a denial letter that gives you appeal rights (IRS: penalty appeal).
Penalties keep growing while you wait. Paying in full stops future penalties and interest from adding up (IRS: failure to pay penalty). If you can’t, the IRS says to pay what you can and apply for a payment plan, which may reduce future penalties (IRS: reasonable cause); see IRS payment plan or offer in compromise: how to choose and apply. Online, a short-term plan is for less than $100,000 in combined tax, penalties and interest (up to 180 days, no setup fee), and a long-term installment agreement is for $50,000 or less when all required returns are filed (IRS: payment plans). The IRS’s get help with tax debt tool asks a few questions to list your options, including penalty relief.
Can you get a penalty refunded after you’ve paid it?
You can still ask, but there is a deadline. Form 843, Claim for Refund and Request for Abatement, is used both to ask the IRS to abate a penalty you still owe and to claim a refund of one you already paid, including a penalty you believe should come off for reasonable cause or another reason the law allows (IRS: Instructions for Form 843). The IRS says to try the number on your notice first and to use Form 843 if it can’t approve relief over the phone, and when a penalty is reduced or removed, it automatically reduces or removes the related interest too (IRS: penalty relief).
The deadline. The Form 843 instructions say that, generally, you must file a claim for a credit or refund within 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. If you don’t file within that period, you may no longer be entitled to a refund. A penalty that came from wrong written advice from the IRS has its own timing rule in the same instructions (IRS: Instructions for Form 843).
Filling it in. The same instructions say to:
- File a separate Form 843 for each tax period and each type of tax.
- List the date of each payment you want refunded.
- Enter the Internal Revenue Code section for the penalty. It’s generally shown on the Notice of Assessment you received.
- Explain your reasons in detail and attach supporting evidence.
- Have both spouses sign if the request relates to a joint return.
- Mail it to the return address on the IRS notice if you’re responding to one. Otherwise, for penalties, mail it to the service center where you’d file a current-year return for that type of tax.
Those steps come from the Form 843 instructions (IRS: Instructions for Form 843). If you no longer have your payment records, what an IRS account transcript can tell you explains how to see your account history, and the prep sheet below has a row for how you asked and the result. If you’d rather not sort the years and payment dates alone, see how we help.
What happens to interest
- The IRS charges interest on penalties, and it automatically reduces or removes the related interest when a penalty is reduced or removed (IRS: penalty relief).
- By law the IRS can’t remove or reduce interest unless the penalty is removed or reduced (IRS: failure to file penalty). It doesn’t remove interest for reasonable cause or as first-time relief (IRS: interest).
- Interest may be reduced only if it built up because of an unreasonable error or delay by an IRS officer or employee. You ask with Form 843 or a signed letter (IRS: interest).
- If you pay a notice in full by its “pay by” date, you aren’t charged interest on the amount shown (IRS: interest).
Which relief to check first
This order is our own suggestion for working through the IRS options above. It isn’t an IRS rule and your facts may call for a different one.
| Step | Ask yourself | If yes, look at |
|---|---|---|
| 1 | Is the notice wrong, for example the return or payment really was on time? | Dispute the penalty the way the notice says, with your proof of filing or payment. |
| 2 | Did you mail on time, rely on written IRS advice, or live in a federal disaster area or serve in a combat zone? | A statutory exception, with that proof. |
| 3 | Is it a failure-to-file, failure-to-pay or failure-to-deposit penalty, with three clean prior years? | First-time abate. For 2025 returns and later, check whether the automatic exemption already applied. |
| 4 | Did something outside your control stop you, and can you show the dates? | Reasonable cause, with documents. |
| 5 | Is it the estimated tax penalty? | The Form 2210 waiver and calculation options. |
| 6 | Was your written request denied? | An appeal, within the deadline in your letter. |
| 7 | None of the above? | Focus on paying the balance so the penalties stop growing (How to build a tax-debt budget the IRS can follow). |
Penalty relief request prep sheet
Fill this in before you call or write. You can download our blank penalty relief prep sheet (CSV file), which opens in Excel, Google Sheets or Numbers. Here it is filled in with the made-up example below:
| Item | Where to check | Example (made up) |
|---|---|---|
| Tax year and return type | The notice | 2024 Form 1040 |
| Notice or letter number and date | Top right corner of the notice | Copied from the notice |
| Response deadline, if the notice gives one | The notice | Written on the calendar |
| Each penalty named on the notice, with its amount | The notice or your IRS online account | Failure to file and failure to pay |
| Tax, penalties and interest as three separate amounts | The notice or your IRS online account | Written as three lines |
| Is the notice correct? | Your return, filing proof and payment records (see honesttaxrelief.com/blog/11.html) | Yes, the return really was late |
| Same return filed on time for each of the 3 prior years? | Your records or account transcripts (see honesttaxrelief.com/blog/6.html) | Yes, 2021 to 2023 |
| Any penalty in those 3 years, other than an estimated tax penalty? | Account transcripts | None |
| Statutory exception? (mailed on time, written IRS advice, federal disaster area, combat zone) | Postmarks, mailing receipts, IRS letters | No |
| Reasonable cause facts: what happened, when, how it stopped you, what you tried | Your own dated notes | Not needed unless first-time abate is turned down |
| Supporting documents, with start and end dates | Hospital, court, disaster or mailing records | None so far |
| How you asked, when, and the result | Your call notes or a copy of Form 843 | Phone call; waiting for the IRS letter |
| Appeal deadline if the request is denied | The denial letter | Not needed yet |
| Business only: failure-to-deposit waived 4+ times in the prior 3 years? | Account transcripts / IRS correspondence | No (individual return) |
| Business only: EFTPS-avoidance deposit penalty charged? | Account transcripts | No (individual return) |
| Event-based or infrequent return (not eligible for FTA/AEP)? | Return type / IRS administrative relief page | No, annual Form 1040 |
| Plan for the remaining tax | Your budget (see honesttaxrelief.com/blog/8.html) | Pay in full from savings this month |
Example (made up)
This is a hypothetical case to show the steps in order. It isn’t anyone’s real situation and isn’t advice.
Someone filed their 2024 Form 1040 a few months late and paid the balance late too. They had filed on time for 2021 through 2023 with no penalties. Their notice lists a failure-to-file and a failure-to-pay penalty. They check the notice against their records, pay the remaining tax from savings so the failure-to-pay penalty stops growing, and call the number on the notice to ask for penalty relief. Because their prior three years are clean, the IRS checks first-time abate; they note the call date and wait for the letter.
Change one fact: they had a late-filing penalty for 2022 that was never removed, so first-time abate doesn’t fit. Now relief depends on reasonable cause. If they were in the hospital around the due date, they write down the dates and send Form 843 with the hospital records. If nothing outside their control caused the delay, they focus on paying off the balance instead.
Change a different fact: it’s their 2025 return that was late, filed in 2026. With three clean prior years, the automatic exemption may mean no failure-to-file or failure-to-pay penalty is assessed at all, and they would get a letter saying so.
Myths that cost people money
- “I couldn’t afford to pay, so that’s reasonable cause.” Lack of funds by itself isn’t reasonable cause (reasonable cause).
- “My preparer was late, so the penalty isn’t on me.” The IRS says you’re generally responsible even if someone else handles your taxes (reasonable cause).
- “I need a special letter to get first-time abate.” You don’t need to name it or send supporting documents; the IRS checks your account (administrative relief).
- “If the penalty comes off, all the interest comes off.” The IRS automatically reduces only the interest related to that penalty (penalty relief), and it doesn’t remove interest for reasonable cause or as first-time relief (interest).
- “The penalties are capped, so waiting costs nothing.” The failure-to-pay penalty keeps going after the failure-to-file penalty maxes out (failure to file penalty), and interest increases what you owe until you pay in full (penalty relief).
Questions to bring to a tax professional
- Which penalties on my notice could qualify for first-time abate, and for which years?
- Did the automatic exemption already apply to my 2025 return?
- Do my facts and documents support a reasonable cause request?
- Should I ask by phone first, or go straight to Form 843?
- If I’m turned down, what is my appeal deadline and what should the appeal include?
- If this is a business return, do the extra failure-to-deposit history rules (four or more prior waivers, or EFTPS avoidance) block first-time abate?
- Is my return type event-based or otherwise listed as not eligible for first-time abate or the automatic exemption?
You can authorize someone to contact the IRS on your behalf with Form 2848. If you have a low income, the IRS points to Low Income Taxpayer Clinics, and if you can’t resolve the penalty on your own it points to the Taxpayer Advocate Service, an independent organization within the IRS (IRS: administrative relief).
Keep full Social Security numbers and bank details out of casual email. If you’re not sure what your account shows for past years, see what an IRS account transcript can tell you.
Next steps
For the bigger picture, from a first notice through collections, see the penalties section of our plain-English guide to IRS tax debt. Honest Tax Relief provides independent education and matching. We are not the IRS, a CPA firm, or a law firm, and no penalty relief or other result is guaranteed. When your prep sheet is filled in, see how we help or contact us with questions.
How this page is made
Every IRS rule, figure and form on this page comes from the IRS page linked beside it, and those pages were checked on October 7, 2026 and checked again on October 19, 2026. We re-checked all fifteen of those IRS pages on October 20, 2026. On October 25, 2026 we added the question about getting a paid penalty refunded, from the Instructions for Form 843 (revised December 2024) and the IRS penalty relief page (last reviewed September 9, 2026), both checked that day. The penalty table, the first-time abate comparison, the business and not-eligible rules, and the “other administrative relief” note restate those IRS pages; the step order, the prep sheet, the example and the questions are our own organizing suggestions. Penalty amounts and relief programs change, so if an IRS page differs from this one, follow the IRS page.
Keep reading: Got an IRS balance-due notice? What to do first · Tax debt documents: what to gather, and how to replace what's missing · IRS tax debt: a plain-English guide, stage by stage
Educational information only. Not IRS, legal, or accounting advice. No outcome is guaranteed.