First-Time Penalty Abatement (FTA) is an IRS program that allows taxpayers to remove or reduce certain penalties if they have a clean compliance history. This relief is available for penalties related to:
- Failure to File.
- Failure to Pay.
- Failure to Deposit.
To qualify for FTA, taxpayers must meet the following conditions:
- No penalties have been assessed in the previous three tax years.
- All required tax returns have been filed.
- The taxpayer is either current on payment of taxes or has arranged a payment plan.
FTA can be requested by calling the IRS or by writing a formal request. If granted, the IRS will remove the penalty, reducing the taxpayer’s overall liability. FTA is especially helpful for taxpayers who have missed a filing or payment deadline due to an oversight or isolated incident and have a history of compliance.