What is a First-time penalty abatement?
First-time penalty abatement (FTA) is an IRS administrative waiver that eliminates failure-to-file and failure-to-pay penalties for taxpayers who meet specific compliance criteria. To qualify, the taxpayer must have a clean penalty history for the three tax years preceding the penalty period, must have filed all required returns or valid extensions, and must have paid or arranged to pay any outstanding tax balance. FTA applies to a single tax period and can be requested by phone or in writing. Tax planning strategies help prevent future penalties by reducing taxable income and ensuring timely compliance.
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