The IRS will often forgive penalties, but it very rarely forgives interest. Whether the IRS will forgive your penalties and interest depends on which charge you are asking about: penalties can be removed through a one-time administrative waiver, a reasonable cause request, or an appeal, while interest can only be reduced when an IRS employee’s own error or delay caused it to accrue. That difference shapes every decision you make about how to handle the bill.
First-Time Abate: The Easiest Path
If you generally file and pay on time and this is your first slip, the First-Time Abate (FTA) waiver is usually the fastest way to get penalties removed. It is an administrative policy, not a statute, and it covers the failure-to-file and failure-to-pay penalties.1Internal Revenue Service. Administrative Penalty Relief
You qualify if three things are true:
- You filed the same type of return for the three tax years before the penalty year with no penalties assessed during that period (or any penalty assessed was later removed for a reason other than FTA).
- You filed the return in question, or at least filed a valid extension.
- You paid, or arranged to pay, any tax due.
You do not need to explain what went wrong or send documentation. The IRS pulls your compliance history and either grants or denies the waiver on the record alone. FTA does not apply to accuracy-related penalties, estimated tax penalties, or returns with event-based filing requirements.
Reasonable Cause: When Life Got in the Way
When FTA is not available, the next route is showing reasonable cause. The standard asks whether you exercised ordinary care and prudence but were still unable to file or pay on time. The IRS decides case by case, and the burden is on you to connect the circumstance directly to the missed deadline.2Internal Revenue Service. Penalty Relief for Reasonable Cause
Circumstances the IRS commonly accepts include natural disasters, fires, or civil disturbances that destroyed records or blocked access to a tax professional; serious illness, hospitalization, or incapacitation of the taxpayer, or the death or serious illness of an immediate family member (spouse, parent, child, sibling, or grandparent); and inability to obtain records despite a timely, good-faith effort.
The written explanation is the core of the request. Give specific dates: when the event began, when you were unable to act, and when the obstacle lifted. Support it with hospital records, insurance claim summaries, FEMA disaster declarations, or a dated letter from your doctor. Vague statements about stress or being overwhelmed rarely succeed. The IRS is looking for something specific, involuntary, and directly tied to the compliance failure.
Accuracy-Related Penalties Have Their Own Defense
The 20% accuracy-related penalty under IRC 6662 applies when an underpayment resulted from negligence, disregard of tax rules, or a substantial understatement of income. It attaches to getting the tax wrong, not to missing a deadline.3Office of the Law Revision Counsel. 26 U.S. Code 6662 – Imposition of Accuracy-Related Penalty on Underpayments
The broadest defense sits in a separate section: no accuracy-related penalty applies to any portion of an underpayment where you can show reasonable cause and that you acted in good faith.4Office of the Law Revision Counsel. 26 U.S.C. 6664 – Definitions and Special Rules Reliance on a competent tax professional, careful records, and an honest effort to get the return right all support this defense. It does not apply to certain listed transactions or disallowed syndicated conservation easement deductions.
Estimated Tax Penalties: Narrower Relief
The penalty for underpaying quarterly estimated taxes runs on its own rules and generally cannot be removed through reasonable cause the way filing and payment penalties can. Two waivers exist. The first covers underpayments caused by a casualty, disaster, or other unusual circumstance where imposing the penalty would be unfair. The second applies if you retired after reaching age 62 or became disabled in the current or prior tax year, and the underpayment was due to reasonable cause rather than willful neglect. Both require a written, signed explanation mailed to the address on your penalty notice.5Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty
Before pursuing a waiver, check whether you owe the penalty at all. You do not if your withholding and timely estimated payments covered at least the smaller of 90% of your current-year tax or 100% of your prior-year tax (110% if your prior-year adjusted gross income was over $150,000), if the balance due after withholding is under $1,000, or if you had zero tax liability the prior year.6Internal Revenue Service. 2025 Instructions for Form 2210 – Underpayment of Estimated Tax by Individuals, Estates, and Trusts
When the IRS Gave You Bad Written Advice
If you asked the IRS a specific question in writing, received a written answer, and relied on that answer to your detriment, the agency must remove any penalty that resulted. Under IRC 6404(f), this abatement is mandatory when the advice responded to your specific written request and your reliance was reasonable. It does not apply if you gave the IRS inaccurate or incomplete information when you asked.7Office of the Law Revision Counsel. 26 U.S.C. 6404 – Abatements
This does not come up often, but when it does, preserving the paper trail is everything. Keep both your original written request and the IRS response. Without that exchange, there is no basis for the claim.
Why Interest Almost Never Gets Forgiven
The law treats interest as a charge for using the government’s money, not as a penalty for bad behavior, and the IRS has almost no discretion to waive it based on your personal circumstances, however sympathetic.
The only statutory basis for interest abatement is IRC 6404(e). It allows the IRS to reduce interest that accrued because of an unreasonable error or delay by an IRS employee performing a ministerial or managerial act. A ministerial act is a routine procedural step requiring no judgment, like transferring a case file between offices. A managerial act involves internal processing decisions, like pausing an audit while reassigning staff. If an IRS employee sat on your case for months without action, the interest that built up during that gap can potentially be abated.7Office of the Law Revision Counsel. 26 U.S.C. 6404 – Abatements
Two limits keep this narrow. No significant part of the delay can be attributable to you: missed document requests or canceled appointments defeat the claim. And the interest must have accrued after the IRS first contacted you in writing about the deficiency. Interest compounds daily, and for the first quarter of 2026 the individual underpayment rate is 7% per year.8Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026 For most people, the interest stays part of the final bill even after penalties come off.
One indirect effect is worth knowing: when a penalty is abated, the interest that had been accruing on that penalty comes off with it. So removing penalties does reduce your total interest, just not the interest that runs on the underlying tax.
How to Ask for Relief
You have three practical ways to make the request.
By Phone
For straightforward cases, especially First-Time Abate, calling the toll-free number on your notice is often the fastest route. Keep the notice in front of you and be ready with the penalty type and amount. If the representative can verify your clean compliance history, you may get an answer on the call. If they cannot resolve it by phone, they will point you to a written request.9Internal Revenue Service. Penalty Relief The Internal Revenue Manual sets a dollar ceiling for oral abatements, though the public version of the manual redacts the exact figure.10Internal Revenue Service. 20.1.1 Introduction and Penalty Relief
By Mail on Form 843
Form 843, Claim for Refund and Request for Abatement, is the standard written method.11Internal Revenue Service. About Form 843, Claim for Refund and Request for Abatement Pull the notice number, tax year, and exact penalty amount from your IRS correspondence. In the explanation section, name the relief category you are claiming (First-Time Abate or reasonable cause) and lay out the facts that support it. For reasonable cause, attach documentation such as medical records, disaster paperwork, or dated correspondence showing your efforts to comply. Send the completed form to the address on your penalty notice by certified mail with return receipt, so you have proof of delivery and a postmark date.
Getting Back Penalties You Already Paid
If you have already paid the penalty and the IRS later abates it, you get a refund. Form 843 handles this on Line 3, which asks for the date of each payment. The deadline is three years from the date you filed the original return or two years from the date you paid the penalty, whichever is later.12Internal Revenue Service. Instructions for Form 843 (Rev. December 2024) Miss that window, and the IRS can wipe the penalty going forward but cannot cut you a check for what you already paid.
If They Say No
A denial is not the end. You generally have 30 days from the date of the rejection letter to request a conference with the IRS Independent Office of Appeals, though your specific letter may set a different timeframe.13Internal Revenue Service. Penalty Appeal
You send a written protest to the address on the letter explaining your appeal rights, not directly to the Appeals office. The IRS unit that denied your request looks at the protest first and tries to resolve the dispute. If it cannot, the case moves to Appeals, an independent office that was not part of the original decision.14Internal Revenue Service. Preparing a Request for Appeals
For interest abatement, there is a separate path. If the IRS denies your claim or fails to act on it within 180 days, you can petition the U.S. Tax Court to review whether the refusal was an abuse of discretion. That petition must be filed within 180 days after the IRS mails its final determination.7Office of the Law Revision Counsel. 26 U.S.C. 6404 – Abatements
Offer in Compromise When the Whole Balance Is Unpayable
When penalties and interest have grown to the point that full payment is genuinely impossible, an Offer in Compromise lets you settle the entire liability (tax, penalties, and interest together) for less than the total owed. The IRS considers three grounds: doubt that you actually owe the assessed amount, doubt that the full amount is collectible given your income and assets, or a finding that collecting in full would create economic hardship or be otherwise unfair.15Internal Revenue Service. Topic No. 204, Offers in Compromise
An OIC is not a penalty-specific remedy. It resolves the whole balance and requires full financial disclosure. If the IRS accepts your offer but you fail to file or pay on time during the five years after acceptance, the agreement unwinds and the original balance, plus all accumulated interest and penalties, comes back. For most people, working through FTA, reasonable cause, and Appeals should come first, with a compromise reserved for cases where the debt truly cannot be paid.