Penalty notice
Washington, DC IRS penalty relief.
Mr. Powell requests penalty relief and handles IRS penalty disputes nationwide, from the first notice through Appeals. First-Time Abate is the IRS administrative waiver for a single year of failure-to-file, failure-to-pay, or failure-to-deposit penalties. It applies when the three preceding years carry no penalties other than an estimated tax penalty, the same return was filed for those years, and the taxpayer is currently compliant. Currently compliant means every required return is filed or extended and any balance is paid or under an arrangement to pay. Irs.gov states that it is being replaced by an Automatic Exemption from Penalty beginning in summer 2026 on the same three-year record. Everything outside an administrative waiver runs on reasonable cause, which Internal Revenue Code section 6664(c) states as the exception to the accuracy-related and fraud penalties. A refund of an already-paid penalty is bounded by the section 6511 claim period, generally three years from filing or two years from payment, whichever is later. The notice in hand controls, and this page does not calculate any date.
The firm has an office at 1629 K Street NW, Suite 300 in Washington, DC and represents individuals and closely held businesses in IRS penalty disputes nationwide.
Each matter begins with the penalty notice, the years named, and the facts that support a request for relief.
The penalty relief procedures described on this page were checked on irs.gov and uscode.house.gov on September 4, 2026. The First-Time Abate criteria were rechecked against Internal Revenue Manual 20.1.1 and irs.gov on September 10, 2026. The notice in hand controls over this summary.
What penalty relief does the IRS offer?
The IRS publishes penalty relief, including relief for reasonable cause and an administrative first-time abate waiver for certain failure-to-file, failure-to-pay, and failure-to-deposit penalties when the published criteria are met. Eligibility depends on the penalty type, the filing and payment history, and the facts.
The request must address the penalty assessed and the grounds for reducing or removing it. This page does not determine whether relief will be granted.
Official source: IRS Penalty relief
Official source: Failure to file penalty
Official source: Failure to pay penalty
Official source: IRS, penalty relief due to First Time Abate or other administrative waiver
Official source: 26 U.S.C. 6664
Official source: 26 U.S.C. 6511
The work
Read the penalty notice.
Read the penalty notice
Identify the penalty type, the tax years, the amount, and the letter that assessed or proposed it.
Match the penalty to the facts
Failure to file, failure to pay, accuracy-related, and information-return penalties rest on different statutes and different records.
Identify the relief path
The IRS publishes penalty relief for reasonable cause and an administrative first-time abate waiver for certain penalties when the published criteria are met.
Prepare the request
State the penalty, the years, the facts that support relief, and the documents the IRS currently requires. This page does not determine whether relief is available.
Reasonable cause and first-time abate.
Reasonable cause relief depends on the facts and circumstances the IRS considers for that penalty. First-time abate is an administrative waiver the IRS describes for certain penalties when the taxpayer’s prior compliance meets the published test. The current IRS penalty-relief page controls which penalties and which years qualify.
If the penalty arose in an examination, start with IRS audit defense. If the penalty sits on an unpaid balance, read IRS collections. A proposed trust fund recovery penalty on Letter 1153 has its own protest path through IRS Appeals.
Penalty relief for District of Columbia taxes.
This section covers penalties on District of Columbia taxes. The IRS penalty relief described above is federal and separate.
Under D.C. Code section 47-4221(a), a penalty is not imposed with respect to a portion of an underpayment if the taxpayer shows that there was reasonable cause for the underpayment and that the taxpayer acted in good faith. The District’s reasonable-cause relief is available for several penalties, including the accuracy-related penalty and the failure to pay and failure to file penalties. Under the District’s rule, reasonable cause generally exists if, based on all the facts and circumstances, the taxpayer exercises ordinary business care and prudence in determining his or her tax obligations, but was unable to comply with a prescribed duty within the prescribed time. Ordinary business care and prudence includes making provision for business obligations to be met when reasonably foreseeable events occur.
The Mayor may abate interest on a deficiency attributable to an unreasonable error or delay by the Mayor, but may refuse if a significant aspect of the error or delay is attributable to the taxpayer. The Mayor must abate any portion of interest or penalty attributable to erroneous advice furnished to the taxpayer in writing by the Mayor, and that rule applies only if, among other conditions, the taxpayer reasonably relied on the written advice.
The Office of Tax and Revenue’s guidance on requesting reconsideration says its Collection and Enforcement Administration decisions could include denial of a request for waiver of penalty and interest.
For the District’s tax agency, see DC Office of Tax and Revenue attorney.
The District of Columbia rules in this section were checked on code.dccouncil.gov and otr.cfo.dc.gov on October 11, 2026. The notice in hand controls over this summary.
Official source: D.C. Code section 47-4221, reasonable cause
Official source: D.C. Code section 47-4222, abatements
Official source: OTR, how to request reconsideration of a decision
Questions
Common questions.
What IRS penalty relief does this page cover?
The IRS publishes two paths. First-Time Abate is an administrative waiver for a single year of failure-to-file, failure-to-pay, or failure-to-deposit penalties when the published prior-compliance test is met. Everything outside an administrative waiver runs on reasonable cause, which Internal Revenue Code section 6664(c) states as the exception to the accuracy-related and fraud penalties. A refund of a penalty already paid is bounded by the section 6511 claim period, generally three years from filing or two years from payment, whichever is later.
What is first-time abate?
First-Time Abate is the IRS administrative waiver of a single year of failure-to-file, failure-to-pay, or failure-to-deposit penalties. The three preceding years must carry no penalties other than an estimated tax penalty, the same return must have been filed for those years, and the taxpayer must be currently compliant, meaning every required return is filed or extended and any balance is paid or under an arrangement to pay. Irs.gov, checked September 10, 2026, states that an Automatic Exemption from Penalty is replacing First-Time Abate on that same three-year record beginning in summer 2026. The penalty notice in hand controls.
Is penalty relief the same as an offer in compromise?
No. A penalty dispute asks the IRS to remove or reduce a penalty on a ground the IRS publishes, either reasonable cause under Internal Revenue Code section 6664(c) or the First-Time Abate administrative waiver. An offer in compromise is a collection alternative that asks the IRS to accept less than the full assessed balance, and it carries a $205 application fee. A payment plan sets terms for paying the balance. The request must address the penalty assessed.
What facts control a reasonable cause request?
Reasonable cause turns on the facts and circumstances the IRS considers for that particular penalty, and Internal Revenue Code section 6664(c) states it as the exception to the accuracy-related and fraud penalties. Failure to file, failure to pay, accuracy-related, and information-return penalties rest on different statutes and different records. A request states the penalty, the tax years, the facts that support relief, and the documents the IRS currently requires. Where the penalty is already paid, the refund claim is bounded by the section 6511 period, generally three years from filing or two years from payment, whichever is later.
What if the penalty arose in an IRS examination?
An accuracy-related penalty usually arises from an examination, so the examination record is where the request starts and IRS audit defense is the relevant path. A penalty sitting on an unpaid balance instead travels with the collection account, alongside any lien or levy. A proposed trust fund recovery penalty on Letter 1153 is a separate notice with its own protest path through the IRS Independent Office of Appeals, and the deadline printed on that letter controls.
Does the District of Columbia offer penalty relief for reasonable cause?
Under D.C. Code section 47-4221(a), a penalty is not imposed with respect to a portion of an underpayment if the taxpayer shows that there was reasonable cause for the underpayment and that the taxpayer acted in good faith. Under the District’s rule, reasonable cause generally exists if, based on all the facts and circumstances, the taxpayer exercises ordinary business care and prudence in determining his or her tax obligations, but was unable to comply with a prescribed duty within the prescribed time. Ordinary business care and prudence includes making provision for business obligations to be met when reasonably foreseeable events occur. That relief applies to the penalties the statute lists. The notice in hand controls over this summary.
What may follow a penalty request.
The IRS may abate the penalty in full, abate it in part, or deny the request. The letter that follows states any remaining balance and any further review that letter offers. Read that letter. Use the IRS Letter Check for a supported notice code.
Related pages
Related IRS penalty resources.
- IRS collectionsPenalty balances often sit on the same account as unpaid tax, liens, and levies.
- IRS audit defenseAccuracy-related penalties often arise from an examination.
- Unfiled tax returnsFailure-to-file penalties begin with the missing return.
- Offer in compromiseAn offer is a collection alternative. It is not the same request as penalty relief.
- Letter 1153A proposed trust fund recovery penalty is a separate notice with its own protest path.
- IRS Letter CheckLook up the code printed on a supported IRS letter.
Send the letter code and the date printed on it.
Tell me which penalty the IRS assessed and the tax years named. Send only a high-level summary.
Schedule an initial consultationRequesting a consultation does not make Mr. Powell your lawyer, provide legal advice, or protect a deadline.
Law Office of Alexander Powell, PLLC. 1629 K Street NW, Suite 300, Washington, DC 20006.