Can you use First-Time Penalty Abatement more than once?

Yes — the name is slightly misleading. First-Time Penalty Abatement can be used more than once over your lifetime. What matters is your compliance history in the three years prior to the tax year for which you are requesting abatement. If you had FTA applied to your 2020 penalties and had a clean record from 2021 to 2023, you could potentially qualify for FTA on 2024 penalties as well.

Does FTA apply to estimated tax underpayment penalties?

No. First-Time Penalty Abatement does not apply to the estimated tax underpayment penalty. It covers failure-to-file, failure-to-pay, and failure-to-deposit penalties only. If you incurred underpayment penalties for prior years, those do not count against you in the three-year compliance check — the IRS does not consider estimated tax penalties when evaluating FTA eligibility.

How do I request First-Time Penalty Abatement if it was not applied automatically?

Call the IRS at the toll-free number on your notice or at 800-829-1040. Tell the representative you are requesting First-Time Penalty Abatement. Have your tax returns and payment history available. If the representative confirms you qualify, the abatement can often be granted on the same call. If you prefer a written record, file Form 843, Claim for Refund and Request for Abatement, which can also be used to request a refund of penalties you have already paid.

What is First-Time Penalty Abatement?