Penalties and abatement
How each civil penalty is computed and how it comes off: administrative waivers such as First Time Abate, reasonable cause, statutory exceptions, and the procedural defenses (supervisory approval, erroneous advice) that examiners and Appeals apply.
First Time Abate: how the IRS applies its one-time penalty waiver
The IRS's administrative waiver for a first failure to file, pay or deposit: the lookback test, the returns it never covers, and how the IRS applies it.
Reasonable cause: what the IRS accepts and what it rejects
The ordinary business care and prudence standard, the reasons the IRM treats as acceptable or weak, and which penalties allow the defense at all.
How to write a penalty abatement request the IRS can grant
Channel, structure and attachments for a penalty abatement request, built around what IRM 20.1.1 tells the reviewing employee to check.
Failure-to-file penalty under IRC 6651(a)(1): computation and relief
The 5 percent per month addition, how months are counted, the minimum penalty, the offset for failure to pay, fraudulent failure to file, and relief.
Failure-to-pay penalty under IRC 6651(a)(2) and (a)(3): computation and relief
The 0.5 percent monthly addition on unpaid tax, the rate changes after a levy notice or under an installment agreement, the 90 percent extension rule, and relief.
Estimated tax penalty for individuals under IRC 6654, and the waivers that remove it
The required annual payment, installment dates, how the IRS computes the penalty at the underpayment rate, the exceptions, and the only two waivers.
Estimated tax penalty for corporations under IRC 6655
Who owes corporate estimates, the required payment and large corporation rules, how the penalty is computed on Form 2220, and the few ways it changes after assessment.
Accuracy-related penalty under IRC 6662: negligence, substantial understatement and the defenses
The ten grounds for the 20 or 40 percent penalty, the negligence and substantial understatement tests, no stacking, and the defenses and procedural requirements.
Civil fraud penalty under IRC 6663 and the IRS's burden of proof
The 75 percent penalty, the clear and convincing burden the IRS carries, the badges of fraud, how a fraud case is developed internally, and where the defenses are.
Written supervisory approval under IRC 6751(b): when a penalty fails without it
Which penalties need written approval, who counts as the immediate supervisor, the deadlines in the 2024 regulations, the electronic-calculation exception, and how to test compliance.
Penalty relief for erroneous IRS advice under IRC 6404(f), and for oral advice
When the IRS must abate a penalty caused by its own written advice, how to claim it on Form 843, and how the IRS treats oral advice and advisor reliance.
Late partnership return penalty (IRC 6698): per-partner computation, notices and relief
The per-partner, per-month penalty for a late or incomplete Form 1065: the 2026 and 2027 rates, how the IRS assesses it, and every relief route the IRM recognizes.
Late S corporation return penalty (IRC 6699): per-shareholder math, assessment and relief
The per-shareholder penalty for a late or incomplete Form 1120-S: current rates, how it stacks with the 6651 penalty when tax is due, and how the IRS removes it.
Rev. Proc. 84-35: reasonable cause relief for small partnerships that file Form 1065 late
When a small partnership's late or incomplete Form 1065 penalty comes off under Rev. Proc. 84-35, what the IRS checks, and why the relief can be reversed.
International information return penalties: Forms 5471, 5472, 3520, 3520-A and 8938, and how relief works
The $10,000 and $25,000 initial penalties, continuation penalties after a 90-day notice, and the narrow relief rules for international information returns.
Failure-to-deposit penalty (IRC 6656) for employment taxes: tiers, averaged penalties and relief
The four-tier deposit penalty on Forms 941, 940, 944 and 945: how the IRS computes it, how to reduce it by redesignating deposits, and when FTA, waivers or reasonable cause apply.
Interest abatement under IRC 6404(e), and when interest on a penalty comes off
Which interest the IRS can remove and which it cannot: interest on abated penalties, ministerial and managerial delay under 6404(e)(1), erroneous refunds, and the Tax Court route.
Requesting penalty abatement by phone, in writing or on Form 843
Which penalties the IRS can abate on a call, what the oral statement limits mean, what a written request needs, and how to complete Form 843 line by line.
Appealing a penalty abatement denial: the request, the Appeals review and what comes after
After Letter 854C or another denial: how to request Appeals, what the IRS sends with the case, how Appeals decides penalty appeals, and the court options if Appeals says no.
Getting paid penalties back: refund claims, the lookback period and Form 843
Why a paid penalty can be abated only within the refund statute, how the 3-year and 2-year rules and lookback limits work, and the steps from Form 843 to refund suit.
Dishonored check and payment penalty (IRC 6657): amounts, electronic payments and relief
The bad check penalty now covers EFTPS, direct debit, card and wire payments. The amounts, how it posts, the good faith exception, and the documentation the IRS requires.
Disaster postponements under IRC 7508A, and penalty relief when a disaster hits
Who counts as an affected taxpayer, how the IRS sets the postponement period, the 120-day mandatory rule, deposits, interest, self-identification, and reasonable cause outside a covered area.
The IRS Criminal Investigation Voluntary Disclosure Practice: Form 14457, the two-part process and the penalty framework
Form 14457 Part I and Part II, the timeliness test, the six-year disclosure period and the civil penalty framework the examiner applies, from IRM 9.5.11.9 and IRM 4.63.3.
Streamlined filing compliance procedures: the domestic and foreign offshore procedures, Forms 14654 and 14653, and the 5 percent penalty
Eligibility, the non-willful certification on Form 14654 or 14653, the covered periods, how the 5 percent penalty base is built, where the package goes and what the IRS does with it.
Delinquent international information returns and FBARs: the reasonable cause route when all income was reported
What the IRS delinquent international information return submission procedures and the FBAR late-filing instructions actually say, how penalties get assessed anyway, and how to position the reasonable cause statement.
ERC claim disallowed (Letter 105-C): the response, the Appeals route, Form 907 and the two-year refund suit clock
The IRS procedure behind an ERC Letter 105-C or 106-C, what the response must contain, how the case reaches Appeals, and how to keep the refund suit window open with Form 907.
Withdrawing an ERC claim, amending it, and what remains of the ERC voluntary disclosure programs
Who can still withdraw an Employee Retention Credit claim, the exact steps for each situation, the amend-instead cases, and the terms and account markers of the two closed ERC voluntary disclosure programs.
Preparer penalties under IRC 6694 and 6695: the conduct standards, the 2026 amounts, how the IRS builds the case and how to contest it
What a return preparer is penalized for and how much, the IRM's procedure from the client exam to Letter 1125 and Appeals, the 3-year statute, the 15 percent special claim and the OPR referral rules.
Forms, tools and templates
Form 843 (refund and abatement)
The December 2024 redesign of Form 843, line by line, with the refund deadlines, mailing addresses and the IRM 20.1.1 rules the IRS applies to penalty requests.
Penalty and interest calculator
Figures the late-filing and late-payment penalties month by month, applies the combination rule and the minimum, and adds daily compounded interest at the quarterly rates.
FTA eligibility checker
Walks the IRM's First Time Abate criteria in order and tells you whether the module meets them, fails, or needs the prior years' transcripts.
First Time Abate letter
A written FTA request that states each IRM criterion the IRS will check, for one tax period, with the alternative reasonable cause request built in.
Reasonable cause letter
A penalty abatement statement structured around the questions the IRS reviewer is told to ask, with a timeline, documents and a perjury declaration.