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IRS First Time Abate Penalty Relief Policy

March 21st, 2014

Posted in Business Law,IRS & Tax Information

The Internal Revenue Service’s (“IRS”) First Time Abate (“FTA”) policy provides for an abatement of certain financial penalties for taxpayers with a record of tax compliance who are current with filing and payment requirements.  It is essentially a streamlined IRS process to abate or remove a first-time tax penalty as a one-time consideration based on a taxpayers’ compliance history.

The FTA penalty relief policy is generally applicable to individual and business taxpayers who have been assessed certain tax penalties such as (i) failure to file, (ii) failure to pay, or (iii) failure to deposit.  To be eligible for relief, the taxpayer must have filed all previously required returns (or filed a valid extension) and paid or arranged to pay any tax amount due based on the same tax return.  For instance, a taxpayer may request relief pursuant to FTA if the taxpayer is in an IRS approved installment agreement, but the taxpayer must be current with the installment payments to qualify.

The relief granted under the FTA policy will typically only be provided for a single tax-period for any individual or business income taxes.  For payroll taxes of a business, the FTA policy may only be provided for one quarter.  For more information regarding the FTA penalty relief policy, please visit www.irs.gov.  Our law firm recommends that local readers consult with a St. Augustine or Jacksonville tax attorney regarding these types of tax procedures and policies.

 

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