Penalty Abatement

I owe penalties for many years: can I get them all abated?

FTA only applies to one tax year/period. If a request for penalty relief is being considered for two or more tax years/periods and the earliest tax year/period meets FTA criteria, penalty relief based on FTA only applies to the earliest tax year/period. Penalty relief for all subsequent tax years/periods will be based on other relief provisions, such as reasonable cause criteria.

So, what do I have to show to get penalties abated for reasonable cause?

Any reason which establishes that you used all ordinary business care and prudence to meet your Federal tax obligations but were nevertheless unable to do so (e.g. fire, casualties, natural disaster, inability to obtain records, etc.). A lack of funds, in and of itself, is not reasonable cause for failure to file or pay on time.

Is Interest Relief Available?

Interest relief exists to the extent it accrued on the penalties that are abated. If an unpaid balance remains on your account, interest will continue to accrue until the account is paid in full.