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First Time Penalty Abatement

Additions to tax and penalties can impose or add significant financial consequences to tax disputes with the IRS.  Avoiding such additions to tax or penalties can be as complicated as substantive tax questions.  Our Law Offices will explore and utilize all available means to avoid imposition of tax penalties on behalf of our clients.

The First-Time Penalty Abatement (FTPA) waiver is an administrative waiver that the IRS may grant to relieve taxpayers from failure-to-file, failure-to-pay, and failure-to-deposit penalties if certain criteria are met. The policy behind this procedure is to reward taxpayers for having a clean compliance history, because everyone is entitled to one mistake. Individuals and businesses may request FTPA for any failure-to-file, failure-to-pay, or failure-to-deposit penalty.  However, FTPA does not apply to other types of penalties such as the accuracy-related penalty.

You may qualify for administrative relief from penalties for failing to file, pay and/or deposit under the FTPA if the following are true:

  • You didn’t previously have to file a return or you have no penalties for the 3 tax years prior to the tax year in which you received a penalty.
  • You filed all currently required returns or filed an extension of time to file.
  • You have paid, or arranged to pay, any tax due.

The failure-to-pay penalty will continue to accrue, until the tax is paid in full. It may be to your advantage to wait until you fully pay the tax due prior to requesting penalty relief under the FTPA.

If you received incorrect oral advice from the IRS, you may also qualify for other administrative relief.