1. When Does First Time Abate Still Apply in 2026?
FTA remains available during the transition, but it no longer governs every new request. The IRS now uses AEP for qualifying newer original returns, while FTA continues for older periods and certain returns processed before AEP became available.
Earlier and Transition Returns Can Still Use Fta
FTA is request-based. A taxpayer with an eligible assessed penalty can ask the IRS to review the account without first proving reasonable cause.
- Eligible 2024 tax-year returns and earlier periods can still use FTA.
- Eligible 2025 quarterly returns remain under FTA rather than AEP.
- Eligible 2025 tax-year returns processed before AEP began may still use FTA.
- Eligible 2026 quarterly returns processed before AEP began may also use FTA.
For eligible original returns due on or after January 1, 2027, AEP replaces FTA. Broader IRS procedural issues are covered under tax law and administration.
Aep Changes How Relief Is Delivered
AEP applies during original-return processing. When the requirements are met, the covered penalty is not assessed, and the IRS sends a notice explaining the relief.
| Issue | Fta | Aep |
|---|---|---|
| How relief starts | Taxpayer requests review | IRS applies it automatically |
| Penalty treatment | Assessed, then removed | Not assessed |
| Lookback | 3 years or 12 quarters | 3 years or 12 quarters |
| Current use | Earlier and transition periods | Eligible 2025 tax-year and 2026 quarterly returns onward |
If an assessment appears on a return that should have qualified for AEP, the taxpayer can ask the IRS to review eligibility.
2. Who Qualifies for First Time Penalty Relief?
The word "first" does not mean that a taxpayer must have a lifetime record with no IRS penalties. The IRS looks at the relevant return type, the required lookback period, and whether the taxpayer meets the applicable filing, payment, and deposit rules.
Fta Focuses on Clean Prior Compliance
FTA generally requires a clean three-year history for the same return type. The taxpayer must also be current with required returns and must have paid, or arranged to pay, tax due.
- No disqualifying penalty was assessed for the same return type during the prior three years.
- An estimated-tax penalty does not count the same way for this test.
- A penalty removed for reasonable cause or IRS error does not necessarily block relief.
- Currently required returns should be filed or covered by a valid extension.
Taxpayers still correcting missing returns should address those filings before relying on FTA. Related filing obligations are discussed under income tax compliance.
Aep Uses Filing and Payment History
AEP looks for timely filing of the same return type and timely payment of tax due during the prior three years, or 12 consecutive quarters for quarterly filers. Business taxpayers also face deposit-history requirements.
- The same return type was timely filed throughout the lookback period.
- Tax due was paid on time during that period.
- No disqualifying penalty remained on the account.
- Repeated deposit waivers or EFTPS avoidance can prevent business relief.
FTA and AEP cover specified failure-to-file, failure-to-pay, and failure-to-deposit penalties, including IRC §§ 6651(a)(1), 6651(a)(2) and (3), 6656, 6698(a)(1), and 6699(a)(1). AEP is limited to eligible return series and does not cover event-based returns, the Daily Delinquency Penalty, or information reporting dependent on another filing.
3. What Should You Do If the IRS Already Assessed a Penalty?
Start with the notice, the return period, and the account history. The key question is whether the penalty belongs under FTA, should have been prevented by AEP, or falls outside both programs.
Match the Request to the Correct Program
FTA can be requested by calling the number on the IRS notice or by sending a written request. Form 843 may be appropriate for some abatement or refund requests, but it is not required for every FTA request.
| Situation | First Step | Key Record |
|---|---|---|
| Older eligible period | Ask for FTA review | Prior compliance history |
| Recent AEP-eligible return | Request AEP review | Filing and payment history |
| Penalty appears incorrect | Challenge the assessment | Return, payment, or deposit records |
| FTA and AEP unavailable | Evaluate another relief basis | Facts and supporting records |
If the assessment itself is disputed, the issue may move beyond first-time relief into a broader tax dispute.
Keep the Initial Request Focused
A taxpayer asking for FTA usually does not need a long hardship narrative. The IRS can review account history, while AEP eligibility turns largely on records already in its system.
- Keep the IRS notice and tax-period information.
- Confirm the return type and processing date.
- Review the prior three years or 12 quarters.
- Keep proof of filing, payment, and deposits if IRS records appear wrong.
If FTA or AEP does not apply, reasonable cause may still be available for a penalty that permits it. If the IRS denies relief and provides appeal rights, follow the deadline stated in the notice. A formal dispute may warrant a tax controversy and litigation review.
4. Frequently Asked Questions
Can First Time Abate be used more than once?
Potentially, but prior penalties or prior relief can affect the next lookback period. Eligibility must be checked for the same return type and the period now at issue.
Does First Time Abate require a reasonable-cause explanation?
No. FTA is an administrative waiver based mainly on compliance history. Reasonable cause is a separate basis for penalty relief.
Do I need Form 843 to request First Time Abate?
Not always. The IRS may consider FTA by telephone or written statement. Form 843 is used for certain abatement or refund requests, depending on the penalty and procedure.
Does AEP remove the underlying tax?
No. AEP prevents an eligible penalty from being assessed. Unpaid tax, interest on that tax, and other penalties outside AEP remain subject to their own rules.
5. Review an IRS First Time Penalty Abatement Issue with Sjkp
The answer can turn on the return type, tax period, processing date, penalty code, and prior compliance history. SJKP's attorneys can review the notice and relevant records, identify whether FTA, AEP, or another federal relief rule applies, and prepare a response suited to the taxpayer's procedural position.
21 Sep, 2026
