The First-Time Abate Rule: A Secret Weapon to Fresh Start Initiative

If you have a clean track record with the IRS but recently received a large bill for late filing or late payment, there is a "secret weapon" you need to know about. It’s called the First-Time Abate (FTA) administrative waiver.

In 2026, the IRS made this process even more accessible, but many taxpayers still pay these penalties because they don't know they have the right to request a "mulligan."

1. What is First-Time Abate?

The FTA is an administrative waiver that allows the IRS to abate certain penalties regardless of the reason for the late filing. Unlike "Reasonable Cause" relief, which requires proof of a house fire, a death in the family, or a medical emergency,  the FTA is based entirely on your past compliance history.

If you have been a "good" taxpayer for the last three years, the IRS will essentially forgive a one-time slip-up.

2. Which Penalties Can Be Removed?

The FTA only applies to the most common "performance" penalties:

• Failure to File: When you didn't send your return in by the deadline.
• Failure to Pay: When you filed but didn't pay the balance by the deadline.
• Failure to Deposit: Specifically for business owners who missed payroll tax deposits.

Note: The FTA does not apply to accuracy-related penalties (underreporting income) or estimated tax penalties.

3. Do You Qualify? (The 3-Year Rule)

To use this "get out of jail free" card, you must meet three strict criteria:

1. Three-Year Clean Slate: You must not have had any "significant" penalties on the same type of return for the three years prior to the year you are penalized.
   
   
2. Filing Compliance: You must have filed all currently required returns (or filed a valid extension).
   
   
   
3. Payment Compliance: You must have paid, or arranged to pay (via an installment agreement), the underlying tax due.

4. Big News for 2026: Automatic Relief

Starting in the 2026 filing season, the IRS announced it would begin automatically applying First-Time Abatement to eligible taxpayers for returns filed for tax years 2025 and later.

However, technology isn't perfect. If you see a penalty on your 2026 notice and you know you have a clean 3-year history, you should still proactively request the waiver rather than waiting for the system to catch it.

5. How to Request the Waiver

If the relief wasn't automatic, you have two ways to claim it:

• By Phone: Call the number on your IRS notice. You don't even need to provide a complicated story. Simply state: "I have a clean compliance history for the past three years, and I would like to request a First-Time Abatement for this penalty."
• By Mail: File IRS Form 843 (Claim for Refund and Request for Abatement).

Don't Leave Money on the Table

The average IRS penalty can increase your tax bill by 25% or more. Before you drain your savings to pay off those extra fees, let us check your transcripts to see if you qualify for the First-Time Abate rule