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For representatives writing to the IRS

A penalty abatement letter for First Time Abate and reasonable cause

First Time Abate can be asked for with a phone call. The letter is for everything else: the representative who wants a record, the penalty that needs a statement signed under penalties of perjury, and the reasonable cause case that has to be argued in writing.

The IRS gives relief from a penalty on two main grounds. First Time Abate is an administrative waiver for a taxpayer with a clean three-year history, and needs no explanation of why the return was late. Reasonable cause means the taxpayer used ordinary business care and prudence and still could not comply, and it is decided on the facts of each case. A first-time penalty abatement letter asks for the first and, where it exists, sets out the second.

Last reviewed against 5 primary sources.

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IRS penalty abatement letter

A request for First Time Abate with an optional reasonable cause section, written for a representative under Form 2848. In Word and PDF.

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No email required.

Next step: send it to the client through FirmHello, where it stays on their record beside everything else they send you.

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The ground is shifting. In summer 2026 the IRS began Automatic Exemption from Penalty (AEP), which stops failure-to-file, failure-to-pay and failure-to-deposit penalties from being assessed at all when a taxpayer has three prior years of timely compliance. AEP starts with 2025 tax year returns and 2026 quarterly returns. For original returns due on or after January 1, 2027, First Time Abate is no longer available. During the transition it still covers 2024 tax year returns, 2025 quarterly returns, and 2025 tax year and 2026 quarterly returns processed before AEP began, and for those it still has to be requested.

The template is written by the practitioner on the client's behalf, with a Form 2848 attached, as an abatement letter to the IRS. What follows explains what the IRS says it looks at. It is not advice on whether a particular client qualifies.

What the IRS looks for in the request

Six things, taken from the IRS's own penalty relief pages and the Internal Revenue Manual its staff work from.

  1. 1

    The notice, the period and the penalty

    Name the taxpayer, the form, the tax period, the notice number and the penalty by name, such as failure to file under IRC 6651(a)(1). First Time Abate applies to a single tax period, so a letter that covers four quarters is asking for one waiver and three reasonable cause decisions.

  2. 2

    The three-year history, stated as the IRS states it

    The same return type was timely filed for the prior three years, or 12 consecutive quarters, and either no penalty was assessed other than an estimated tax penalty, or any penalty assessed was later abated for reasonable cause or IRS error. Check the transcripts before you write it.

  3. 3

    The extra tests for a business

    For business returns the IRS also requires that the failure to deposit penalty was not waived four or more times in the prior three years, and that it was not charged for avoiding the Electronic Federal Tax Payment System (EFTPS).

  4. 4

    Reasonable cause, told in order

    The manual asks what happened and when, how it stopped the taxpayer complying, how they handled the rest of their affairs in that time, and what they did once it ended. A letter that answers those four questions, with dates, is the letter the reviewer is trained to read.

  5. 5

    Evidence for each fact

    Hospital or medical records, documents showing a natural disaster, and copies of the letters asking a third party for missing records along with the replies. For an illness the manual asks for its dates, duration and severity, not only its name.

  6. 6

    The representative's authority

    Attach Form 2848. The Form 843 instructions require it when an authorized representative files the claim for the taxpayer.

The penalty abatement letter

Written for United States. The downloads are the same text, in Word and PDF, for your letterhead. Keep the reasonable cause section only where there is a reasonable cause case to make.

[Firm letterhead]

[Date]

Internal Revenue Service
[Address shown on the notice]

Re: Request for penalty relief
Taxpayer: [Name]
Taxpayer identification number: [SSN / EIN]
Form and tax period: [Form 1040 / 1120-S / 941], [period]
Notice: [CP number], dated [date]
Penalty: [failure to file (IRC 6651(a)(1)) / failure to pay (IRC 6651(a)(2)) / failure to deposit (IRC 6656)], [amount]

Dear Sir or Madam,

Request

We represent [Taxpayer name] under the enclosed Form 2848, Power of Attorney and Declaration of Representative. We request that the [penalty] assessed for [tax period] be removed, together with the interest charged on it.

First Time Abate

We request relief under the First Time Abate administrative waiver. [Taxpayer name] timely filed [Form] for each of the three tax years preceding [tax period] ([years]), and no penalty other than an estimated tax penalty was assessed for those years [or: the penalty assessed for [year] was abated for reasonable cause].

[For a business: The failure to deposit penalty was not waived four or more times in the three years preceding this period, and the penalty was not charged for avoiding EFTPS.]

The return for [tax period] was filed on [date]. [The tax due was paid in full on [date] / The balance is being paid under an installment agreement dated [date], and payments are current.]

[If there is also a reasonable cause case] Reasonable cause

If the waiver is not available, we ask that the penalty be removed for reasonable cause. [Taxpayer name] exercised ordinary business care and prudence but was unable to [file / pay / deposit] on time for the following reasons.

What happened and when: [Facts, with dates. For example: on [date] [Taxpayer] was admitted to hospital with [condition] and remained under treatment until [date].]

How it prevented compliance: [Why this stopped the filing or payment, and why nobody else could have done it in time.]

The taxpayer's other affairs: [How the taxpayer's other obligations were handled in the same period.]

Compliance once the circumstances ended: [What the taxpayer did, and when. For example: the return was filed on [date], [number] days after [Taxpayer] returned to work.]

The following documents are enclosed: [list].

Closing

Please direct any questions to me at [telephone] or [email]. If the request is not granted in full, we ask for a written explanation of the decision.

Sincerely,
[Name], [CPA / EA / Attorney]
[Firm name]
CAF number: [number]

Enclosures: Form 2848; copy of notice [CP number]; [supporting documents]

[Include for any penalty other than failure to file, pay or deposit] Taxpayer's declaration

Under penalties of perjury, I declare that I have examined the facts stated in this letter and, to the best of my knowledge and belief, they are true, correct and complete.

[Taxpayer name]

Signature ______________________ Date ____________

Before you use this

Supplied as-is, with no guarantee. These templates are general information, not legal advice, and not a substitute for it. Have your own legal adviser review and adapt one to your practice and your jurisdiction before you put it in front of a client. FirmHello accepts no responsibility or liability for any use made of them.

Where penalty abatement requests go wrong

Blaming the preparer

The IRS says taxpayers are generally responsible for complying even when someone else handles their taxes, and its manual says relying on another person to perform a required act is generally not reasonable cause. A letter that leads with "our firm missed it" argues the wrong ground.

Trying to save First Time Abate for later

The manual has staff apply the waiver before reasonable cause whenever its criteria are met. Asking only for reasonable cause does not keep the waiver in reserve, and a first request for relief is not by itself grounds for the waiver.

Writing about a penalty that was never assessed

From the 2025 tax year, a client who qualifies for AEP receives a notice saying the penalty was not assessed. Read the notice before drafting: there is nothing to abate, and the client needs nothing from you.

Other letters a firm sends

Tax preparation Tax preparation Form 7216 consent Section 7216 consent What it is Engagement letters Form 1041 Form 1041

Questions about penalty abatement letters

Can First Time Abate be requested by phone?

Yes. The IRS says to call the toll-free number on the notice or send a written statement or Form 843, and that you do not need to name First Time Abate or send documents: it reviews the account itself. The manual also lets staff consider oral and unsigned requests for failure to file, pay and deposit penalties from a taxpayer's authorized representative. A letter is the better choice when you want a record, or when you are arguing reasonable cause.

Do I need Form 843, or will a letter do?

The IRS accepts either a written statement or Form 843 for these penalties. If you use Form 843, the instructions call for a separate form for each tax period and type of tax, the taxpayer's signature or a Form 2848 for a representative, and filing at the address on the notice when you are responding to one.

Does the IRS remove the interest too?

The IRS says it automatically reduces or removes the interest related to a penalty that is reduced or removed. Interest on the underlying tax stays. Under First Time Abate the failure-to-pay penalty can keep accruing until the tax is paid in full.

What counts as reasonable cause?

The IRS lists fires, natural disasters or civil disturbances, inability to get records, death, serious illness or unavoidable absence of the taxpayer or immediate family, and system issues that delayed a timely electronic filing or payment. It says that lack of funds by itself, mistakes and lack of knowledge generally are not, though each can support a case alongside other facts.

What if the request is refused?

The IRS says a taxpayer can appeal an adverse penalty relief decision. Ask for the decision in writing, and keep the evidence you sent: whoever reviews it next will want the same documents.

Should someone review this letter before we send it?

Yes. This is a template supplied as-is, not advice on a particular client's position. Penalty relief rules are changing through 2026 and 2027, so check the IRS pages on the day you write. The evidence is usually the slow part: a client portal for accountants such as FirmHello can send the client a request list for the records the letter depends on, with reminders until they arrive.

Sources

The primary sources this page is written against, last read against it on . Check them before relying on a detail; rules and thresholds change.

  1. IRS IRS "Penalty relief due to First Time Abate or other administrative waiver"
  2. IRS IRS fact sheet FS-2026-12 (July 2026), Automatic Exemption from Penalty
  3. IRS IRS "Penalty relief for reasonable cause" (reviewed 2026-06-21)
  4. IRS IRM 20.1.1 (transmittal 2025-11-25)
  5. IRS Instructions for Form 843 (rev. 12/2024)

What changed

  • Added an editable Word (.docx) copy of the letter beside the PDF.

The evidence is the slow part

A request list asks the client for the records the letter relies on and chases them until they arrive, so the letter is not waiting on a missing statement.

No card and no sales call. If you would rather tell us about your firm first, use the longer form.