The IRS has a program in place called the First Time Abate (FTA) which is designed to provide relief for certain taxpayers facing penalties. Currently, the granting of that relief is not automatic. But it could be in the near future. Until that time, taxpayers should be aware of the FTA requirements and procedures for requesting it.
The First Time Abate program removes certain late-payment or late-filing penalties for individuals, businesses, and employers with clean compliance histories. A person or entity can apply for abatement if: 1) they did not previously have to file a return, or did not have any penalties on the three previous years’ tax returns, 2) they filed all required returns, or filed an extension, and 3) they have paid or arranged to pay any taxes due.
With many eligible taxpayers not taking advantage of FTA, the IRS has considered different ways of promoting the program and increasing its use. According to a 2018 IRS memo, one recommendation was to automatically grant FTA if the taxpayers’ circumstances fit the criteria. However, the IRS has not started to automatically abate penalties just yet. For now, taxpayers still have to request penalty abatement. They can make that request by phone, in writing, or via IRS Form 843.
If you have any questions about the First Time Abate program, how to submit an official request, or about Tax Law in general, please contact Wiggam & Geer by calling (404) 233-9800 or by messaging us through our website.