IRS penalties: What they mean and how to get penalty relief 

Getting an IRS notice with penalties can be stressful. The good news: many IRS penalties follow set rules, and in many cases, you can ask the IRS to remove (abate) them. The key is knowing (1) what type of penalty you have, and (2) which relief option fits your situation. The tips below walk you through the most common penalties and the fastest paths to relief. 

The two penalties most people can get removed 

Most penalty relief requests involve these two common penalties: 

• Failure to File (late return): you filed your tax return after the deadline (including extensions). 
• Failure to Pay (late payment): you didn’t pay the tax you owed by the due date. 

Tips that help right away: File any missing returns as soon as you can (even if you can’t pay yet), pay what you can, and set up a payment plan for the rest. These steps don’t automatically erase penalties, but they put you in a better position to request relief. 

Estimated tax penalties: usually not removable (but often avoidable) 

If you underpay taxes during the year (for example, from self-employment or investment income), the IRS may charge an estimated tax penalty. In most cases, the IRS treats this as an interest-type charge for paying late throughout the year—so it generally can’t be “abated” the way many other penalties can. 

How to avoid it next time: (1) Increase paycheck withholding (submit a new Form W-4 to your employer), and/or (2) make quarterly estimated payments if you earn income without withholding (self-employment, side gigs, investments). If your income jumped this year, adjusting sooner can reduce or eliminate next year’s penalty. 

3 main ways to get IRS penalty relief 

For many penalties (especially late filing and late payment), the IRS generally has three main relief options. Picking the right one—and requesting it the right way—matters. 

1. First-Time Abatement (FTA): the easiest win if you qualify

   FTA is often the fastest way to remove a penalty if you’ve usually been compliant. You generally qualify when all of the following are true: 

   • You had no penalties (for the same type) in the prior 3 tax years. 
   • You’ve filed all required returns (no missing years). 
   • You’ve paid what you owe or you’ve set up a payment arrangement (like an installment plan). 

   What it can remove: It applies to Failure to File, Failure to Pay, and Failure to Deposit penalties (not to estimated tax penalties). 

2. Reasonable Cause: when something outside your control caused the problem 

   Reasonable Cause relief is harder than FTA because the IRS wants details and proof. You must show you acted with “ordinary care” and that events beyond your control kept you from filing or paying on time. Ignorance of the tax law or a general lack of funds is typically not considered acceptable as reasonable causes.

   For late filing: The IRS is usually looking for a serious reason you couldn’t manage your tax responsibilities—such as hospitalization, severe illness, or another situation that made you unable to handle your affairs. 

   For late payment: The IRS often focuses on whether paying on time would have kept you from covering basic living expenses. If you could only pay part of the bill, it helps to show you paid what you could and tried to set up a plan for the rest. 

   Reasonable Cause requests are commonly made using Form 843, Claim for Refund and Request for Abatement, with a written statement and supporting documents. If the IRS denies your request, you may be able to ask for a review (including through IRS Appeals). Keep copies of everything you submit and note the date and method you sent it. 

3. Disaster Relief: if you were affected by a federally declared disaster

   If you live in (or your records are located in) an area the IRS lists as a federally declared disaster area, you may get extra time to file/pay and automatic penalty relief. Tip: Check the IRS disaster relief announcements and make sure the IRS has your current address—relief is often applied automatically, but sometimes you need to call if the penalty posted anyway. 

   Interestingly, the IRS may offer more disaster relief for the pandemic. In November 2025, a court found (Kwong v US) that the IRS should have provided both interest and penalty relief for a 3 ½ year period related to the pandemic disaster. The IRS has not agreed with the court’s interpretation of the disaster relief period as of May 2026. However, taxpayers have until July 10, 2026, to file a protective claim for refunds and/or abatement of these penalties and interest. Taxpayers should watch for Kwong-related developments and their impact on their claims. 

How to strengthen a reasonable-cause request (evidence that helps) 

If you’re asking for reasonable-cause relief, your explanation matters—but documentation usually matters more. The strongest requests clearly answer: What happened? When did it happen? How did it prevent filing/paying? What did you do to fix it as soon as you could? 

Examples of supporting documents the IRS often finds persuasive: 

• Medical issues: hospital/doctor records, dates of treatment, and a short timeline showing how it affected your ability to file/pay. 
• Disasters or casualty events: FEMA/insurance documents, police/fire reports, repair invoices, or proof your records were destroyed. 
• Financial hardship (for late payment): bank statements, proof of income loss, rent/mortgage and utility bills, and a budget showing you couldn’t pay without missing necessities. 
• IRS advice errors: notes from an IRS call (date/time/agent if available) and any letters/notices showing you relied on incorrect information. 

If you’re denied at first, don’t assume it’s over. Denials can happen even with good facts—especially if the first request was missing documents or a clear timeline. You can often try again with stronger support or request a review through IRS Appeals. 

How to ask the IRS for penalty relief (practical steps) 

1. Identify the penalty and tax year from your IRS notice (keep the notice—your request should match what the IRS assessed). 
2. Get compliant first: file any missing returns and pay what you can (or set up a payment plan). This often helps with FTA eligibility. 
3. Choose your best argument: FTA (clean history), reasonable cause (documented hardship/incident), or disaster relief (eligible area/timeframe). 
4. Make the request and keep records: If you call, write down the date/time and what was said. If you mail or fax forms/letters, keep copies and proof of sending. 
5. Follow up: If you don’t hear back or the IRS denies the request, ask what’s missing and whether you can request a review. 

Penalties can add up fast, but many people qualify for relief—especially if they’ve normally filed and paid on time or had a documented hardship. The sooner you file missing returns, respond to IRS notices, and submit a well-supported relief request, the better your chances of getting penalties removed and moving on. 

Learn how a Jackson Hewitt tax resolution specialist can help at https://www.jacksonhewitt.com/tax-resolution/. 

This article is for general information and isn’t tax advice. IRS rules and fees can change, and your best option depends on your specific facts.