Getting IRS penalties removed
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- You
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- Blaga Veleva, EA
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- Penalty relief
For eligible 2025 and later returns, the IRS applies the Automatic Exemption from Penalty on its own, with no request, and sends a notice confirming it. For earlier years, you ask for First Time Abate or reasonable cause relief. Removing a penalty also removes the interest tied to it. Blaga Veleva, EA, checks each year and asks the IRS for you.
What should you do this week about IRS penalties?
Find out which penalties were charged, and for which years. Your notice, often a CP14 or CP161, lists them. Your account transcript shows the full history. Keep paying the tax itself if you can, because the IRS says it can't remove interest unless the penalty is removed or reduced. Penalties for failure to file, failure to pay and failure to deposit qualify for relief regardless of amount. Bring the notice to a free consultation if you are not sure which penalty is which.
What is first-time abatement and do you qualify?
First Time Abate (FTA) removes those penalties for one period if your history is clean. The IRS penalty relief page requires that you filed the same return type on time for the prior three years, and had no penalties then, or had them removed for reasonable cause or IRS error. You request it by phone, letter, or Form 843. You don't need to name FTA or send documents.
What changed in 2026 with the Automatic Exemption from Penalty?
For eligible 2025 and later returns, relief arrives on its own. In its July 8, 2026 announcement (IR-2026-83), the IRS said "Taxpayers do not need to take action to receive this relief" and that it will "issue a notice confirming that the relief was granted." Its penalty relief page says "AEP begins summer 2026." AEP covers failure to file, failure to pay and failure to deposit penalties on eligible original returns for tax year 2025 and 2026 quarterly returns onward, on Forms 1040, 1065, 1120, 940, 941, 943, 944, 945 and CT-1. Under AEP, the failure-to-pay penalty does not accrue. During the transition, some people who qualify may still get a penalty notice, and the IRS says they "may contact the IRS to request First Time Abate." FTA still applies to earlier years, so older penalties still need a request.
Can late partnership return penalties be waived?
Often, yes. A late Form 1065 is charged per partner, per month, up to 12 months. For returns due after 2025 the base is $255 per partner per month, per the IRS failure-to-file page. That adds up fast. One of our clients asked Blaga to request first-time relief on a late partnership return, and the IRS granted it. The client called it "a tremendous professional advise." Your result depends on your own history.
What if you don't qualify for First Time Abate?
Ask for reasonable cause relief. The IRS says the failure-to-file penalty doesn't apply if you can show the failure was due to reasonable cause. Serious illness, a death in the family, a disaster, or records you couldn't get are typical examples. The request needs a clear timeline and proof. Blaga writes it so the facts line up with the dates the IRS sees. Each request is reviewed on its own facts, so no one can promise approval. A request that matches the IRS record date by date stands on firmer ground.
How does Blaga Veleva request penalty relief?
She pulls your transcripts under Form 2848, matches each penalty to the right route, and calls or writes the IRS. If you also owe tax, she pairs the request with an installment agreement, which drops the failure-to-pay rate to 0.25% a month for individuals who filed on time. If penalties came from late returns, she files those first. See more about back taxes.
Which penalties don't qualify for First Time Abate?
Some penalties fall outside it. The IRS says returns filed once or infrequently, the Daily Delinquency Penalty, and information reporting that depends on another filing are not eligible. Businesses also need a clean deposit history: the failure-to-deposit penalty can't have been waived four or more times in the prior three years, or charged for avoiding EFTPS. For those, reasonable cause is usually the route. Bring your IRS notice so the penalty code is clear.
Questions people ask
Q1How do I get IRS penalties removed?
For eligible 2025 and later returns, the Automatic Exemption from Penalty applies on its own, with no request. For earlier years, ask for First Time Abate if your last three years were clean, or request reasonable cause relief. An Enrolled Agent can make the request for you.
Q2Is first-time abatement going away?
It is being replaced for new returns. The IRS announced the Automatic Exemption from Penalty in July 2026 (IR-2026-83) for tax year 2025 returns and later, and says it will replace First Time Abate for eligible returns with original due dates on or after Jan. 1, 2027. First Time Abate still applies to earlier years, and you can still request it if a qualifying 2025 penalty notice arrives anyway.
Q3Does penalty abatement remove interest too?
Interest tied to a removed penalty is reduced or removed automatically. Interest on the tax itself stays, since the IRS can't remove it by law.
Q4Can late partnership return penalties be waived?
Yes. The Automatic Exemption applies on its own to eligible 2025 and later Form 1065 returns. For earlier years, First Time Abate works if the partnership has three years of clean history, and reasonable cause is the other route.
Q5Do I have to pay the tax before asking for relief?
No. You can ask at any time. Under First Time Abate, the IRS says the failure-to-pay penalty may keep accruing until the tax is paid in full, so paying sooner limits it.