The Internal Revenue Service (IRS) reminds taxpayers who received penalty notices that they may still qualify for penalty relief, even after missing filing or payment deadlines. In its June 2025 guidance, the agency said programs are available to reduce or eliminate penalties for eligible taxpayers.
The IRS offers a First Time Penalty Abatement, the most common relief for taxpayers with a clean compliance history. This administrative waiver can remove penalties for those who filed required returns on time during the past three tax years and have not been assessed penalties for that period.
Taxpayers may also qualify if they can establish reasonable cause, showing that they exercised ordinary business care and prudence but were prevented from meeting tax obligations. Circumstances can include serious illness, natural disasters, or death in the immediate family.
Specific penalties may be waived under statutory exceptions defined in the Internal Revenue Code. For example, relief may apply if the IRS provided incorrect written advice that led to a filing error or late payment.
To qualify for First Time Penalty Abatement, taxpayers must show a record of good tax compliance. This means all required tax returns for the past three years were filed, and no penalties remain unresolved. The relief can apply to a single tax period involving a failure to file, pay, or deposit penalty.
The IRS explains that taxpayers may request an abatement even if the full tax debt has not been paid. However, interest and failure to pay penalties will continue to accrue on any unpaid balance until the debt is settled.
Reasonable cause relief requires proof that the taxpayer tried to comply with tax law but could not because of circumstances outside their control. According to the IRS penalty handbook, a valid reasonable cause argument should demonstrate that the taxpayer exercised ordinary business care and prudence, yet could not meet obligations.
The IRS has streamlined the process for requesting penalty relief. Taxpayers can often order a penalty abatement by calling the toll-free number on their IRS notice. An IRS representative will review eligibility and determine whether administrative relief, such as First-Time Penalty Abatement, can be granted.
If phone relief is not available, taxpayers can submit a written request. This is done using Form 843, Claim for Refund and Request for Abatement, sent to the IRS address listed on the penalty notice. The request should outline the facts and circumstances that support relief, such as reasonable cause or clean compliance history.
Taxpayers do not need to mention specific programs by name. The IRS generally checks eligibility for all applicable options, including administrative waiver, first-time penalty abatement, and reasonable cause relief. If a request is denied, the agency issues a denial letter, and the taxpayer may appeal through the IRS Independent Office of Appeals.
The IRS notes that the most common penalties involve failure to file, failure to pay, and failure to deposit penalties. These charges can add up quickly when taxpayers miss deadlines or fall behind on obligations. According to the Internal Revenue Code, penalties are designed to encourage timely filing and voluntary compliance.
While penalty abatement can reduce or remove these charges, interest generally accrues until the underlying tax debt is paid. In cases where penalty relief is granted, the IRS adjusts related interest tied to the penalty amount. This provides partial interest relief, easing the financial burden for qualifying taxpayers.
Agency officials stress that taxpayers should act quickly after receiving a notice. Delays can increase penalty amounts and make it more challenging to resolve unpaid tax balances.
The IRS urges taxpayers to act quickly after receiving a penalty notice, since interest and penalties for failure to pay continue to build until the tax debt is resolved. Prompt requests can reduce the total amount owed, and approved relief removes penalties and related interest charges.
Taxpayers may appeal through the IRS Independent Office of Appeals or pursue other relief programs, such as reasonable cause or statutory exceptions, if a request is denied. The agency advises taxpayers to review eligibility, prepare documentation, and contact the IRS representative listed on their notice or submit a written request.
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