Penalty Abatement | Reduce or Eliminate IRS Penalties
Reduce or Remove IRS Penalties That Inflate Your Tax Debt
IRS penalties can grow fast.
Late filing, late payment, and underpayment penalties can double an original tax balance over time — even when the underlying tax isn’t that large.
The good news is that many IRS penalties can be reduced or removed through Penalty Abatement, a relief option under the broader IRS Fresh Start framework.
At Newline Tax Group, we build and submit penalty abatement requests that meet IRS standards and actually get reviewed — not ignored.
What Is IRS Penalty Abatement?
Penalty Abatement is official IRS relief that allows penalties to be removed or refunded when specific criteria are met.
It applies to both individuals and businesses with back taxes.
There are three primary types of IRS Penalty Abatement.
Types of IRS Penalty Abatement
First-Time Abatement (FTA)
If you have a clean filing and payment history for the previous three years, the IRS may remove penalties once per taxpayer.
No special explanation is required — but eligibility must be confirmed and requested properly.
Reasonable Cause Abatement
If penalties resulted from circumstances outside your control, the IRS may grant relief when supported by documentation.
Common qualifying situations include:
• serious illness or hospitalization
• natural disaster or significant property loss
• job loss, divorce, or documented financial hardship
The explanation must meet IRS standards.
This is where most self-filed requests fail.
Statutory Exception
Applies when IRS penalties resulted from incorrect written advice or administrative errors by the IRS.
This type of abatement is rare — but very powerful when applicable.
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Why Penalty Abatement Matters
IRS penalties often make up 25%–50% of a total balance, sometimes more.
Reducing penalties can:
• lower the total amount owed
• make Installment Agreements more affordable
• improve eligibility for Offers in Compromise
• reduce long-term interest accumulation
• relieve financial pressure under Fresh Start programs
Penalty Abatement doesn’t fix everything — but it can change what’s possible.
Why Work With Newline Tax Group
Most penalty abatement requests fail because:
• the wrong penalties are requested
• explanations don’t meet IRS criteria
• documentation is incomplete
• follow-up is mishandled
Our licensed IRS Enrolled Agents manage the process end to end.
We will:
• review IRS account transcripts
• identify penalties eligible for removal
• determine which abatement type applies
• draft compliant Reasonable Cause statements
• submit and follow up until a decision is reached
This isn’t a form submission.
It’s a case-building process.
FAQs About IRS Penalty Abatement
Do IRS penalties go away automatically?
No. Penalties must be requested through the proper IRS process.
Can interest be removed as well?
Generally, interest remains unless it directly resulted from a penalty that is successfully abated.
Is Penalty Abatement a one-time option?
First-Time Abatement is typically available once. Reasonable Cause relief may be available again if new qualifying circumstances arise.
Get Relief From IRS Penalties
If penalties are inflating your balance and making repayment unrealistic, understanding your abatement options is the first step.
Our team focuses on reducing unnecessary IRS penalties so taxpayers can move forward with a realistic resolution strategy.
