Penalty AbatementThe IRS's first-time abatement penalty waiver (FTA) allows tax payers to have penalties removed or reduced if they qualify for a penalty abatement waiver.
In plain english, the government is essentially giving now compliant tax payers a one-time penalty amnesty or free pass. This does not mean you no longer owe taxes, the IRS just removes the interests and penalities from not paying the tax debt.
- Individual taxpayers can request an FTA from the IRS only for penalties classified as "failure-to-file" and "failure-to-pay". Estate and gift taxes do not qualify for FTA waivers.
- Business and payroll taxpayers can request an FTA for penalties following into these classification: failure-to-file, failure-to-pay, and/or failure-to-deposit.
- The estimated tax and any accuracy-related penalties cannot be removed.