IRS Penalty Abatement: How to Get Penalties Removed in 2026

IRS penalties can add 25-75% to your original tax bill. But many taxpayers do not realize that penalties can be removed. Here is how.

Common IRS Penalties

• Failure-to-file: 5% per month, up to 25% of unpaid tax
• Failure-to-pay: 0.5% per month, up to 25% of unpaid tax
• Accuracy-related: 20% of the underpayment
• Fraud: 75% of the underpayment
• Estimated tax penalty: Varies based on underpayment amount

Three Ways to Get Penalties Removed

1. First-Time Penalty Abatement (FTA)

The easiest method. You qualify if:

• You have filed all required returns (or filed a valid extension)
• You have not had penalties in the prior 3 tax years
• You have paid, or arranged to pay, any tax due

FTA applies to failure-to-file, failure-to-pay, and failure-to-deposit penalties. It is administrative (not based on reasonable cause), so the IRS should grant it automatically if you qualify.

2. Reasonable Cause

If you cannot use FTA, you may qualify for penalty abatement based on reasonable cause. Acceptable reasons include:

• Serious illness: You or an immediate family member
• Natural disaster: Federally declared disaster affecting your area
• Death: Of the taxpayer, spouse, or immediate family member
• Inability to obtain records: Fire, flood, or other destruction
• Erroneous IRS advice: Written or oral
• Reliance on a tax professional: If you provided accurate information and the professional made the error

Document your reasonable cause thoroughly. Include:

• Medical records (illness)
• Insurance claims (disaster)
• Death certificates
• Correspondence with the IRS
• Written communication with your tax preparer

3. Statutory Exception

Certain penalties have built-in exceptions:

• Estimated tax penalty: Waived if you paid 90% of current year or 100% of prior year
• Late filing: Waived if you had no tax due
• Underpayment: Waived for certain disaster areas

How to Request Penalty Abatement

By Phone

Call 800-829-1040 for individual accounts or 800-829-4933 for business accounts. Have your tax information ready.

In Writing

Send a letter to the IRS service center that handles your account. Include:

• Your name, SSN/EIN, and tax period
• Which penalties you want removed
• Your reason (FTA or reasonable cause)
• Supporting documentation

Form 843

For formal penalty abatement requests, use Form 843 (Claim for Refund and Request for Abatement).

The Financial Impact

Penalty abatement can be significant:

Scenario	Tax Owed	Penalties	After Abatement
Late filing (5 months)	$10,000	$2,500	$10,000
Late payment (2 years)	$20,000	$2,400	$20,000
Combined	$15,000	$6,000	$15,000

That is a 20-40% reduction in your total balance.

Get Professional Help

A tax professional knows which abatement strategy works best for your situation and can maximize the amount removed. Find an expert near you.