IRS Penalties Adding Up? See If Penalty Relief May Apply, With a Huntsville Team

Penalties can make up a big part of an IRS balance. The IRS has two common ways to remove them: First-Time Penalty Abatement and Reasonable Cause. We review your IRS records and tell you in writing which, if any, may fit your situation. Start online. No SSN on this page.

Got a penalty notice? $249 Notice Review

A flat-price written read of your IRS letter (CP14 or another penalty or balance-due notice), what the penalties are, and what to do next. It credits toward the IRS Situation Assessment within 30 days.

Which IRS penalties can be removed?

Penalty relief can apply to the most common IRS penalties:

  • Failure to file (return filed late)
  • Failure to pay (tax not paid by the due date)
  • Failure to deposit (payroll/employment tax deposits not made on time or correctly)

Other penalties may also qualify for reasonable cause. Your review shows which penalties are on your account and for which years.

First-Time Penalty Abatement (FTA)

The IRS may remove failure-to-file, failure-to-pay and failure-to-deposit penalties for one tax period if you generally meet all of these:

  1. Clean history: you filed the same type of return on time for the 3 years before the penalized year (12 quarters for quarterly returns), with no penalties in those years except the estimated tax penalty, or any penalty was removed for reasonable cause or IRS error (not an earlier FTA).
  2. Filed: you filed all currently required returns, or a valid extension.
  3. Paid or arranged: you paid, or arranged to pay, any tax due (for example, a payment plan you’re current on).

FTA doesn’t require you to explain why you were late, and you don’t have to send documents. The IRS checks your account history.

Businesses: FTA isn’t available if the IRS waived failure-to-deposit penalties 4 or more times in the prior 3 years. FTA doesn’t apply to event-based returns (like estate or gift tax returns).

New in 2026: automatic penalty relief for some taxpayers

The IRS is replacing FTA with an Automatic Exemption from Penalty (AEP). Starting with tax year 2025 returns (and 2026 quarterly returns), taxpayers with 3 years of on-time filing and payment may not be charged failure-to-file, failure-to-pay or failure-to-deposit penalties at all, and get a notice saying so. During the changeover, some people who qualify may still get a penalty notice and can still ask for FTA. Penalties on 2024 and earlier years still need a request. Our review checks which applies to you.

Reasonable Cause relief

If FTA doesn’t fit, the IRS may remove penalties when you used ordinary business care and prudence but still couldn’t meet your tax obligations because of facts and circumstances beyond your control. Examples the IRS lists for late filing or payment include:

  • Death, serious illness or unavoidable absence of you or your immediate family
  • Fire, natural disaster or civil disturbance
  • Being unable to get your records
  • System issues that delayed an electronic filing or payment

What usually doesn’t qualify on its own, per the IRS: relying on a tax preparer to file on time, not knowing the rules, simple mistakes, or lack of money by itself. Other facts can still help, so we look at the whole picture. Reasonable cause doesn’t apply to some penalties, such as the estimated tax penalty. Accuracy-related penalties have their own good-faith test.

The IRS looks at what happened, when, how it stopped you from filing or paying, and how quickly you got back on track once it ended. Supporting documents matter.

Documents that help a reasonable cause request

  • Hospital or court records, or a doctor’s letter with start and end dates
  • Records of a disaster or other disruption
  • Copies of letters to and from the IRS
  • Receipts, forms or other proof of your attempts to file or pay

How penalty relief is requested

The IRS may remove some penalties over the phone. Otherwise, relief is requested in writing, often on Form 843 (Claim for Refund and Request for Abatement). If the IRS says no, there are appeal rights. If you authorize us, we can make the request for you.

What about interest?

The IRS charges interest on penalties. When a penalty is reduced or removed, the IRS automatically reduces or removes the interest tied to that penalty. Interest on the tax itself generally stays.

What penalties cost you

Penalties and the interest on them keep growing until the balance is paid, so checking for relief early can matter. Your review shows the penalty and interest amounts on each year.

How it works

  1. Start online. Begin with the $249 Notice Review if you have a letter, or the IRS Situation Assessment for the full picture.
  2. We pull your IRS records (with your authorization) and see which penalties are on each year.
  3. You get written findings on whether FTA, reasonable cause, or neither may apply, and what else may help.
  4. If you want us to request relief for you, Representation is quoted in writing before work starts. (Representation)

Want the full picture? IRS Situation Assessment: $599 / $799

A written review of your IRS records with recommendations, including penalty relief options, plus an optional appointment of up to 30 minutes after you read it. ($799 Rush: the same full review and plan, with priority handling.) Your $249 Notice Review credits toward it within 30 days.

Who we help

Individuals, 1099 contractors and small business owners with IRS penalties on a balance, a late-filed return, or missed payroll deposits. No debt minimum.

Related help

Why Caros Group

Online help from a Huntsville team. Work with a licensed tax professional online. Flat, written prices shown before work starts, not after a sales call. We check first-time abatement before building a reasonable cause request. No debt minimum. Results depend on your facts; we tell you honestly what may apply.

Frequently asked questions

What is IRS First-Time Penalty Abatement?

An IRS administrative waiver that may remove failure-to-file, failure-to-pay or failure-to-deposit penalties for one tax period if you have a clean 3-year history, filed required returns and paid or arranged to pay. For tax year 2025 and later returns, the IRS is moving to automatic relief for eligible taxpayers.

What counts as reasonable cause?

Facts and circumstances beyond your control despite ordinary care, such as serious illness, a death in the family, a disaster, being unable to get records, or system issues that delayed an electronic filing or payment.

Will removing penalties remove interest?

The IRS automatically reduces or removes the interest tied to a removed penalty. Interest on the tax itself generally stays.

Do I need to pay the tax first?

For FTA you must have paid or arranged to pay, such as being current on a payment plan.

Does relying on my tax preparer count as reasonable cause?

Usually not by itself. The IRS says you’re generally responsible for your return even if someone else prepares it. Other facts can still matter.

Is penalty relief guaranteed?

No. The IRS decides each request based on your history and facts. Our written review tells you what may apply.

Is there a minimum amount I have to owe?

No. We help with any balance.

Does the $249 Notice Review count toward anything?

Yes. It credits toward the IRS Situation Assessment within 30 days.

Have a penalty notice? Or want the full picture?