[Date]
Internal Revenue Service
[Address or fax number shown on the notice]
Re: Request for First Time Abate penalty relief
Taxpayer: [Client legal name]
Taxpayer identification number: [SSN or EIN, last four digits only if your firm policy requires]
Form and tax period: [Form 1040 / 941 / 1065 / 1120-S], [Tax period, e.g. 12/31/2025]
Notice: [CP or letter number] dated [Notice date]
Penalties: [Failure to file / failure to pay / failure to deposit] in the amount of [Amount shown on notice]
To whom it may concern:
I represent the taxpayer named above under the enclosed Form 2848 (CAF number [Representative CAF number]). On the taxpayer's behalf, I request abatement of the [penalty type(s)] assessed for the period shown above under the First Time Abate administrative waiver described in IRM 20.1.1.3.3.2.1.
Eligibility
- Filing history. The taxpayer filed the same return, [Form number], for each of the three tax periods preceding the penalized period: [List the three prior periods]. [If any prior period had no filing requirement, say so and why]
- Penalty history. No penalties other than an estimated tax penalty were assessed for those three periods, and no penalty for those periods was abated under the First Time Abate waiver or for tolerance.
- Related returns. [For joint filers: both spouses meet the criteria for the three prior years. For employment tax: no more than the permitted FTD waivers and no late, unpenalized Form 1120 or 1120-S in the look-back period. Delete if not applicable.]
- Current compliance. All required returns have been filed. The tax for this period was [paid in full on [date] / is being paid under an installment agreement dated [date] / will be paid on receipt of the adjusted balance].
Request
Please abate the [penalty type(s)] for [Tax period] in full. If the IRS determines that the First Time Abate criteria are not met, please treat the enclosed statement as a request for relief based on reasonable cause and consider it under IRM 20.1.1.3.2.
If you need anything further, contact me at [Phone] or [Email]. Please send a copy of any correspondence to me as the authorized representative.
Sincerely,
[Representative name, credential]
[Firm name and address]
CAF [CAF number]
Enclosures: Copy of [Notice number]; Form 2848; [Reasonable cause statement, if included as an alternative]; [Proof of payment, if paid]
When to use this letter
First Time Abate (FTA) is an administrative waiver, not a reasonable cause determination. The IRS describes it as available “the first time a taxpayer is subject to one or more of the referenced penalties for a single return filed by the taxpayer.” It covers only three penalty families: failure to file under IRC 6651(a)(1), 6698(a)(1) or 6699(a)(1); failure to pay under IRC 6651(a)(2) and (a)(3); and failure to deposit under IRC 6656. If the client was hit with an accuracy-related penalty, an information return penalty or an international information return penalty, this is the wrong letter; see the reasonable cause letter and international information return penalties.
Because FTA “does not carry any oral statement authority (OSA) threshold,” a phone call to the number on the notice often resolves it faster (see penalty abatement by phone). A written request leaves a paper record and suits business accounts with several modules to review. You can test eligibility first with the FTA eligibility checker.
The criteria the letter has to show
IRM 20.1.1.3.3.2.1(4) sets out the tests the reviewer applies to the same type of return as the penalized one (for individuals, MFT 30 and 31 are looked at together; for employment tax, MFT 01 and 14):
| Test | What the IRS checks | What the letter says |
|---|---|---|
| Filing | The same return was filed for the 3 years preceding the penalized period, unless there was no filing requirement | Names the three prior periods and states each was filed |
| Penalty history | No unreversed penalties in those years other than an estimated tax penalty, and no notice showing an assessed penalty | States there were no penalties other than estimated tax |
| Prior FTA | No penalties reversed with penalty reason codes 018, 020 or 021 in the look-back | States no prior FTA or tolerance abatement |
| Business accounts | Not four or more FTD waiver codes in the 3-year history; no late, unpenalized Form 1120 or 1120-S in the look-back | Optional paragraph for BMF clients |
Two rules limit what the waiver can do. It applies to one tax period only, and the IRS says the waiver “is not applicable based solely on a taxpayer’s first request for penalty relief.” A client who was noncompliant in the look-back years but never asked for relief does not qualify. And “An FTA waiver is not penalty-specific”: any unreversed penalty on the prior modules (other than estimated tax) disqualifies every penalty on the period under review.
The IRM also excludes returns with an event-based filing requirement and information reporting that depends on another filing. Its list of examples includes Forms 706, 709, 990, the Form 1099 series, 8300, 3520, 3520-A, 5471 and 5472 (the last two subject to an exception in IRM 20.1.9).
What each part does
The reference block gives the employee what is needed to pull the right module: form, period, notice and penalty amounts.
The eligibility bullets track the IRM tests in order. The reviewer still verifies them on IDRS, and the IRM tells employees using the Reasonable Cause Assistant to “manually verify all applicable modules,” and stating the facts makes a mismatch easy to explain.
The current compliance paragraph matters for failure to pay. If tax is still owed, the IRM has the employee abate the failure to pay penalty assessed to date with reason code 062, and the penalty keeps accruing on the unpaid balance until it is paid; the additional amount can be removed under FTA after full payment. Stating the payment status up front avoids a second round.
The alternative request asks the IRS to consider reasonable cause if FTA fails. Under IRM 20.1.1.3, relief is considered in a set order: correction of IRS error, statutory and regulatory exceptions, administrative waivers, then reasonable cause. If FTA applies, the IRS uses it first and tells the client the penalty was removed for compliance history, using language such as “We approved your request to remove the penalties. However, we only granted penalty relief because you have a good history of filing and paying on time.” If the client has a strong reasonable cause case and you would rather keep FTA for a later year, say so in the letter.
Where to send it and what to attach
- Send the letter to the address or fax number on the penalty notice. The Form 843 instructions point taxpayers responding to a notice to follow the notice’s instructions, and say Form 843 may not be needed.
- Attach a copy of the notice and a Form 2848 covering the form and period, unless one is already on the CAF (see Form 2848).
- Attach proof of payment if the balance is paid, and any reasonable cause statement you want considered in the alternative.
- If you prefer a form, Form 843 works: check the penalty box on line 7, cite the Code section, and use the letter text as the line 8 explanation.
- Calendar a follow-up. If the request is denied, the client can ask for Appeals review in writing (IRM 20.1.1.4.1.2); see appealing a penalty abatement denial.
Mistakes that get FTA requests denied
- Asking before the account is fixed. The IRM says “Do not consider penalty relief until all issues have been addressed.” If a payment was misapplied or an extension was not posted, fix that first; the penalty may reverse on its own.
- Using FTA on an IRS error. The IRM tells employees not to grant FTA when the penalty results from IRS error, and to reverse it under reason code 045 instead. Saying “error” when there was one preserves the waiver.
- Requesting FTA for several periods. Only one period qualifies; the rest need reasonable cause. The IRM example of a Form 941 filer with four penalized quarters allows FTA only for the first quarter.
Transition to Automatic Exemption from Penalty. The IRS First Time Abate page (reviewed October 2026) says FTA “is transitioning to a new relief called Automatic Exemption from Penalty (AEP), starting Summer 2026”. For Forms 1040, 1065 and 1120, Forms 940 through 945 and Form CT-1, beginning with 2025 tax year returns and 2026 quarterly returns, AEP is applied when the original return completes processing: with three prior years (or 12 consecutive quarters) of timely filing and payment, “The IRS won’t assess penalties for failure to file, failure to pay, or failure to make a deposit” and sends a letter saying the relief was applied; “You don’t need to contact the IRS or respond to the notice.” FTA continues to apply to earlier periods and to returns AEP does not cover, and the page says to contact the IRS if a penalty was assessed that should have qualified. See First Time Abate.
Questions practitioners ask
Does the client have to ask for FTA by name?
No. The IRM says “Taxpayers are not required to specifically request penalty relief under the FTA waiver to be eligible for the waiver.” Employees are told to apply it when the criteria are met, including when penalties are proposed in an exam. Asking explicitly still helps because it prompts the check.
Can FTA remove a penalty on a late Form 1065 or 1120-S?
Yes for the late filing penalties under IRC 6698(a)(1) and 6699(a)(1). It does not cover the incomplete return penalties under 6698(a)(2) and 6699(a)(2). See the 6698 penalty and the 6699 penalty.
What if the IRS grants FTA but the client also had reasonable cause?
The IRS applies FTA first and tells the client relief was based on compliance history. Future penalties will be judged on reasonable cause criteria.
Does the request need to be signed under penalties of perjury?
For FTF, FTP and FTD penalties the IRS can act on oral or unsigned requests, and FTA has no dollar threshold. A signed letter from the representative with a Form 2848 on file is the normal written form.