Can your IRS penalty come off? Check in four questions

You have an IRS penalty and want to know if it can come off. If your 3 earlier years were clean, penalty abatement under the first-time rule can take it off when you ask, and a good reason can work when they were not. Answer four questions, or have a licensed tax pro ask for you.

Do you qualify?

The questions follow the rules on the IRS administrative penalty relief page. Pick yes or no for each.

• 3 years

  First-time removal looks at the 3 tax years before the late one.

  if your record fits, the IRS does not ask for proof or a reason.

  check those 3 returns were filed and paid on time.

• Refund window

  Already paid the penalty? The Form 843 instructions say you generally must claim within 3 years after filing the return or 2 years after paying, whichever is later.

  for example, a return filed August 14, 2025 and paid that day has until August 14, 2028.

  check both dates on your records before you call or mail the form.

• 2025 returns

  The IRS started applying this relief automatically from tax year 2025, as Automatic Exemption from Penalty.

  older years still need you to ask, and notices still go out during the change.

  call about any 2024 or earlier penalty, and about a 2025 notice if you had 3 clean years.

The first-time free pass

The IRS calls it First Time Abate. It covers three penalties: late filing, late payment and a late payroll deposit. The size of the penalty does not matter.

You need a clean record for the 3 tax years before. That means the same return filed on time each year. It also means no penalty in those years, or one later removed for a good reason. An estimated tax penalty in those years does not count against you.

You also do not need to name the rule or send proof. The IRS page says it reviews your account itself. The first-time removal page has the call script.

A good reason the IRS accepts

The IRS calls this reasonable cause, and it looks at each case on its own facts. Its reasonable cause page lists fires and natural disasters first. A death or serious illness in your close family counts. So do records you could not get, and e-file or payment system problems.

Some reasons usually fail. Relying on a tax preparer, not knowing the rule, a simple mistake, or not having the money are not enough by themselves. The reasons page covers the proof to include.

How much you would get back

Odette owed $4,000 and filed and paid four months late. The IRS charged 4.5% a month for filing late and 0.5% a month for paying late, which comes to $720 and $80.

When a penalty comes off, the IRS penalty relief page says the interest on that penalty comes off with it. The tax and its own interest stay. Run your own numbers in the penalty calculator.

How to ask

1. Find the toll-free number in the top right corner of your notice.
2. Have the notice, the penalty you want removed, and your reason in front of you.
3. Call and ask for the penalty to be removed. The IRS may decide during the call or ask for more information.
4. If they can't approve it on the phone, mail Form 843 with a letter. The Form 843 tool fills in the official IRS PDF and prints your cover letter.

Business owners have their own pages for S corps, partnerships and payroll Form 941. If the answer is no, see what to do after a denial.