First Time Penalty Abatement

The first time penalty abatement or FTA was introduced almost 15 years ago. Despite its long time in existence, it is almost never taken advantage of by most qualified taxpayers.

To take advantage of the FTA, the taxpayer must first be compliant. This means you must be current in filing and paying your taxes. Additionally the taxpayer may not be assessed other considerable fines in the three years surrounding this penalty. Basically the IRS is willing to waive the penalties if a taxpayer is generally in good standing.

Then why don’t more taxpayers request the FTA?

The answer is that many taxpayers as well as professionals don’t know the FTA exists. If they are aware of its existence, most are unaware of the faulty system the IRS uses to determine eligibility. The software used to determine eligibility frequently makes mistakes and if you have a strong case we suggest that you try and persuade the IRS to reverse the software determination.

What penalties does the FTA cover?

• Failure to File
• Failure to Pay
• Failure to Deposit

When can you request the waiver?

• Before it is assessed
• After it is assessed
• After it is paid

The bottom line:

There are many IRS programs out there that are not advertised. Not all tax practitioners know of the FTA and how it can be used to reduce a taxpayer’s liability. Even if you have been turned down for the FTA or other program, you can usually appeal most IRS decisions.