Two doors lead out of most penalties. Most taxpayers never knock on either.
Door 1: First-Time Abatement (FTA)
If you have a clean compliance history for the prior three years — no penalties, returns filed, taxes paid or arranged — failure-to-file and failure-to-pay penalties on one period can be removed almost administratively. Many FTAs are granted in a single phone call by a representative who knows to ask.
Door 2: Reasonable cause
For everything FTA doesn't cover — including international information penalties like Form 5472's $25,000 — the standard is that you exercised ordinary business care and still couldn't comply. Winning fact patterns include:
- Serious illness, death in the family, or disaster during the filing period
- Reliance on a professional who dropped the ball (documented)
- First exposure to an obscure requirement — the classic foreign-owner 5472 situation — combined with prompt voluntary correction
What abatement doesn't remove
Interest generally survives (it's statutory), and accuracy-related penalties need stronger substantiation. And nothing gets abated while returns are still missing — file first, then ask.
The bottom line
Penalties are a negotiation the IRS expects you to open. MOREOFTAX prepares FTA requests and reasonable-cause packages — including 5472 abatements, our specialty — on a flat fee, and we tell you honestly when a case is weak.
Penalty on your account?
Send the notice — we'll tell you which relief door your facts open, before you pay anything.
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