Question 1

What is First-Time Penalty Abatement?

Accepted Answer

An administrative waiver (IRM 20.1.1.3.3.2.1) the IRS grants when the taxpayer has a clean compliance history: no penalties in the prior 3 years, all required returns filed, and any tax due paid or arranged. It removes failure-to-file, failure-to-pay and failure-to-deposit penalties — often with a single letter or phone call.

Question 2

Do I qualify for first-time abatement?

Accepted Answer

Three tests: (1) no penalties (or only an estimated-tax penalty) in the 3 prior tax years; (2) all currently required returns filed or extended; (3) the tax is paid or on a payment plan. Interest on the penalty is removed with it, but interest on the tax itself stays.

First-Time Abatement letter — generated, not templated