The IRS has amended its “first time abate” policy. This policy provides a one-time consideration of penalty relief for any taxpayers who have been subjected to a first-time penalty charge based on the taxpayer’s previous compliance.
This type of penalty removal is a one-time consideration available only to those with a first-time penalty charged and a credible history of compliance. According to the policy change, the “first time abate”, or FTA, penalty relief option is not applicable if the taxpayer has not filed all returns and paid, or made arrangements to pay, all taxes currently owed. The FTA relief also only applies to a single tax period. For instance, if a request for relief is being processed it will only be applied to the earliest period that meets the criteria.
The FTA penalty relief does not apply to returns with an event-based filing requirement in the prior three years. The IRS has a list of forms and documents to be excluded from the penalty relief.
Any taxpayers who have been previously billed for penalty charges and feel they have cause within reason, should submit their explanation, along with their bill, to the IRS service center or call the IRS for further assistance. Form 843 may also be used in order to claim a refund and request for abatement.