Vargas filed her 2024 Form 1040 on July 14, 2025, ninety days late, with $20,000 of tax owed and unpaid until August 1. The IRS assesses failure-to-file, failure-to-pay, and interest. She has a spotless prior history. Three abatement pathways may erase most of the bill, but each demands a specific form, factual showing, and timeline.
The most commonly abated civil penalties:
KEY: FTA applies to FTF, FTP, and FTD only. Accuracy-related and fraud penalties never qualify for FTA. Estimated-tax penalties are not "abated" in the usual sense; they are waived only under the narrow §6654(e)(3) hardship rules or the §6655(e) corporate safe harbors.
The basis for having penalties abated or refunded breaks into three doctrinal lanes:
First-Time Abate (FTA). An administrative waiver in IRM 20.1.1.3.6. Three eligibility prongs:
- Clean compliance history. No penalties (other than estimated tax) in the 3 tax years prior to the year requested
- All filing requirements current. No outstanding returns and no open filing-extension issues
- Paid or arrangement. The tax is paid or under an installment agreement in good standing
Common mistakes
- Requesting FTA on an accuracy-related penalty. FTA covers FTF, FTP, FTD only. Accuracy penalty under §6662 requires reasonable cause and good faith under §6664(c). Trap answer: "FTA waives any first-occurrence penalty."
- Filing Form 843 to abate income tax. Form 843 does not abate income tax shown on Form 1040; use Form 1040-X. Trap answer: "843 abates any tax."
- Treating interest like a penalty. Interest is statutory; it does NOT abate for illness, death, or reasonable cause. Only §6404 grounds (excessive/illegal, ministerial delay, erroneous written advice, 36-month suspension) qualify. Trap answer: "Reasonable cause abates interest."
Bottom line
- Form 843 abates penalties, interest, and non-income tax refunds; income tax refund claims go on Form 1040-X
- First-Time Abate (FTA): administrative waiver for FTF (§6651(a)(1)), FTP (§6651(a)(2)/(3)), and FTD (§6656) only; accuracy and fraud excluded
- FTA eligibility: 3 prior clean compliance years, all returns filed, tax paid or under installment agreement
- Reasonable cause: ordinary business care and prudence prevented compliance; Boyle blocks reliance for filing deadlines
Exam shortcut
Run FTA first. Before drafting reasonable cause, check the 3-year lookback. If clean, FTA is a one-paragraph win on FTF, FTP, or FTD. Saves hours of facts-and-circumstances narrative. Form 843 for everything except income tax. Memorize the carve-out: income tax shown on Form 1040 goes on 1040-X. Penalties, interest, employment, excise, FICA, and Medicare overpayments all go on 843. Interest equals §6404 only.
The full lesson (about 2,505 words, 17 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- 2
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