How to Request and Qualify for IRS first-time penalty abatement

How to Request and Qualify for IRS first-time penalty abatement

September 19, 2022 Off By Alma Haney

There are many terms surrounding tax obligations with the IRS and one of which is first-time penalty abatement. What it is and how to apply for IRS first time penalty abatement. It is the process by which the IRS removes penalties from your owed taxes including penalties from failure to pay the tax, failure to file, and failure to deposit.

First-Time Penalty Abatement Penalty Covered

  • It removes penalties from failure to file the tax owed to the government.
  • It removes penalties from failure to deposit.
  • It removes penalties for failure to pay taxes.

How To Qualify?

There are basic criteria you must meet to qualify for first time penalty abatement. These are the following:

– You must not have penalties or penalty abatements for three prior tax years. The penalty amount considered by the IRS must not exceed $100. For instance, if you have a penalty for the last three tax years, you can still qualify provided it is not more than $100.

– You must make sure you were able to file all necessary returns or extensions. In other words, you need to be compliant with IRS standards. You will not qualify if you happen to have outstanding paperwork. To increase your chances of getting approved, you must make your papers ready. File all requested tax returns including extensions with the IRS.

– You need to make sure you already made payment arrangements on your outstanding tax payables. It does not necessarily mean you pay the tax amount in full for you can always make payment arrangements for instalment payment. For instance, if you are currently on a tax payment plan, you need to have a record of regular payments. That way you will be able to show to the IRS that you are in good standing.