What Is a Tax Abatement

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Meta Description: Tax abatement reduces or removes penalties. IRS First-Time Abatement removes penalties automatically for clean history. Form 843 required. Reasonable cause also qualifies.

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H1

What Is a Tax Abatement? IRS Penalty Relief Explained

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ANSWER SECTION

A tax abatement is the reduction or elimination of tax penalties (not the underlying tax) assessed by the IRS or state authorities. Abatement removes penalties for failure-to-file, failure-to-pay, or accuracy issues—and in some cases, the interest associated with those penalties. The IRS offers two main paths: First-Time Abatement (FTA) for taxpayers with clean history, and Reasonable Cause for circumstances beyond your control. Use Form 843 to request abatement.

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H2: Types of IRS Penalty Abatement

First-Time Abatement (FTA):

• Automatic for qualifying taxpayers
• No written explanation required
• Applies to failure-to-file, failure-to-pay, and failure-to-deposit penalties
• Can remove penalties for one tax period

Reasonable Cause Abatement:

• Requires written explanation of circumstances
• Based on facts and circumstances evaluation
• Considers ordinary business care and prudence
• Broader applicability than FTA

Statutory Exception:

• Rare, specific situations defined in tax code
• Example: IRS providing erroneous written advice that you relied on

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H2: First-Time Abatement Requirements

To qualify for FTA, you must have:

1. Clean history: No penalties for the 3 tax years prior to the penalty year
2. Filing compliance: All required returns filed
3. Payment arrangement: Current on payments or arranged installment agreement

How to request:

• Call the IRS number on your penalty notice
• Mail Form 843 with "First-Time Abatement" written as the reason
• Use IRS online account (limited availability)

Success rate: Approximately 90% of FTA requests are approved automatically.

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H2: Reasonable Cause Grounds

The IRS may grant abatement for reasonable cause including:

Death or serious illness:

• Death of immediate family member
• Serious illness of taxpayer or immediate family
• Incapacitation preventing compliance

Natural disasters:

• Federally declared disasters
• Fire, casualty, or other disturbances

System issues:

• IRS e-file system outage on deadline
• Natural disaster preventing mail delivery

Reliance on professional:

• Reliance on tax professional who made error
• Must show you provided complete information

What does NOT qualify: Lack of funds (unless due to circumstances beyond control), ignorance of law, reliance on erroneous advice from non-professionals.

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H2: How to Request Abatement

Form 843: Claim for Refund and Request for Abatement

Information to include:

• Tax year and return type
• Penalty type and amount
• Specific reason (FTA or reasonable cause explanation)
• Supporting documentation for reasonable cause

Timeline:

• FTA: Immediate approval by phone or 2-4 weeks by mail
• Reasonable cause: 30-60 days for review
• Refund of abated penalties: 2-3 weeks after approval

Key Form: Form 843 (file within refund statute expiration period)

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H2: Related Tax Questions

For complete Form 843 instructions, see our IRS Form 843 guide covering refund claims and penalty abatement requests.

Learn about general tax compliance requirements in our tax compliance page covering penalties and enforcement.

For information on IRS refund deposits and codes, review our IRS TREAS 310 tax ref guide.

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