Did you receive an IRS notice assessing penalties?

If so, time out.

You may qualify for the IRS’ first­-time penalty abatement (FTA) waiver.  The FTA is an administrative waiver that the IRS grants to taxpayers providing relief from failure ­to ­file, failure to ­pay, and failure to ­deposit penalties if certain criteria are met.  The policy behind this procedure is to reward taxpayers for having a clean compliance history; everyone is entitled to one mistake.  Individuals and businesses may request FTA for any failure ­to­ file, failure to ­pay, or failure ­to ­deposit penalty.  FTA does not apply to other types of penalties such as the accuracy ­related penalty.

To qualify for the FTA waiver a taxpayer must meet the following criteria:

  1. Filing compliance:  Must have filed (or filed a valid extension for) all required returns and can’t have an outstanding request for a return from the IRS.
  2. Payment compliance:  Must have paid, or arranged to pay all tax due (can be in an installment agreement as long as the payments are current).
  3. Clean payment history:  Has no prior penalties (except an estimated tax penalty) for the preceding three years.
    1. Note:  If the taxpayer received reasonable cause relief in the past, he/she is still eligible for FTA

Another thing to consider is that the penalty notice may be erroneous which happens often.  We may not need to request the FTA.  Simply sending a letter to the IRS detailing specific items might resolve the issue.  So, before you move forward or make a payment, give us a call at 337.406.1099 or contact us today and we’ll review the penalty.  We’ve been successful in requesting waivers and getting penalties abated.