IRS Penalty Relief, Including First-Time Abatement

Automatic penalty relief, new for 2025 returns

Starting with original 2025 returns, the IRS removes late-filing and late-payment penalties automatically for taxpayers who qualify. No application, form or separate request is required. You generally qualify if:

• it’s an original return, not an amended one, for 2025 or later,
• you had no penalties of $1 or more on the same type of return in the three prior years (the estimated tax penalty doesn’t count against you, and neither do penalties already removed for reasonable cause or IRS error),
• the return is filed within three years of its original due date, and
• on a joint return, both spouses meet the test.

It covers individual, partnership, S corporation and corporate returns, among others. It doesn’t cover accuracy-related penalties, information return penalties or the estimated tax penalty, and interest isn’t forgiven.

First-time abatement for earlier years

For 2024 and earlier returns, and for 2025 returns the automatic relief doesn’t reach, first-time abatement is still available. It’s for taxpayers with a clean three-year penalty history who have filed all required returns and paid, or arranged to pay, the tax. Unlike the automatic relief, you have to ask for it. For original returns due in 2027 and later, the automatic relief replaces it.

Reasonable cause

If something outside your control kept you from filing or paying on time, such as a serious illness, a death in the family, a disaster, or records you couldn’t get, the IRS can remove penalties for reasonable cause, whatever your history. It takes a written explanation and supporting documents. One rule is built in: if you filed an extension on time, paid at least 90% of your tax by the April due date, and paid the rest with your return, reasonable cause is presumed for the late-payment penalty.

How I help

• I pull your IRS transcripts to see every penalty, by year and type.
• I check whether automatic relief has already been applied before asking for anything.
• I request first-time abatement or reasonable-cause relief in writing, with the right documents, under a signed Form 2848.
• If you also need a payment plan, I ask for relief first, so you aren’t paying off penalties that could have come off.

What it costs

There’s no fixed fee. I quote in writing after I’ve read your notice or transcript. Book a free 15-minute consultation.

Sources: IRC §§ 6651, 6698 and 6699; Treas. Reg. § 301.6651-1(c)(3); IRS News Release IR-2026-83; IRS Fact Sheet FS-2026-12.

Related: IRS Tax Resolution · IRS Payment Plans · Unfiled Tax Returns · What a late 1065 or 1120-S costs