Who qualifies for IRS penalty abatement?

The IRS recognizes four distinct grounds for penalty abatement. Eligibility under any one is sufficient — a single Form 843 can cite multiple grounds in the alternative, and the IRS examiner will consider each. The four grounds are tested independently, so a taxpayer who fails one may still succeed under another.

Ground 1: AEP, then FTA on transition periods

Administrative relief (AEP or FTA) is in play if all of the following are true:

• The penalty in question is failure-to-file, failure-to-pay, or failure-to-deposit
• You filed and paid on time for the three preceding tax years (or 12 consecutive quarters)
• No stuck penalty of the same type in that lookback (other than penalties later abated for reasonable cause)

AEP may prevent the assessment automatically on eligible 2025 tax-year and 2026 quarterly returns — no Form 843. FTA can still be requested for certain prior and transition periods. For original returns due on or after January 1, 2027, FTA is replaced by AEP. See FTA & AEP.

Ground 2: Reasonable Cause

You qualify if you can establish that:

• You exercised ordinary business care and prudence in your tax compliance
• A circumstance beyond your control prevented timely compliance — illness, casualty, records destruction, advisor error, family crisis
• You acted promptly to correct the failure once the circumstance resolved

Reasonable cause has no lookback requirement and applies to every assessable penalty — including penalties FTA cannot reach (accuracy-related, information returns, certain trust fund penalties). See Reasonable Cause.

Ground 3: Statutory Exception

You qualify if:

• The penalty was caused by incorrect written advice from the IRS (§6404(f))
• Or the penalty was caused by IRS processing delay, lost correspondence, or systemic error
• Or the IRS failed to apply a mandatory statutory provision that was in force for that period

A 2025 Court of Federal Claims decision (Kwong v. United States) addressed COVID-era postponements under §7508A(d). The primary refund-claim window tied to that period closed July 10, 2026. See the archive note — we do not pitch new COVID claims as if that window is open.

Ground 4: Administrative Waiver

The IRS periodically issues administrative waivers for specific events. Those that still matter are current IRS communications, not a closed disaster window:

• Named relief in a current IRS news release, notice, or policy statement
• Disaster-zone relief — FEMA-declared disasters that extend filing and payment deadlines now
• Combat-zone relief — extended deadlines for taxpayers serving in combat zones

Who is generally ineligible?

• Taxpayers with willful, fraudulent, or intentional failures (criminal exposure rather than abatement territory)
• Taxpayers whose failure was due solely to lack of funds without a triggering reason
• Taxpayers requesting abatement of penalties already barred by the §6511 statute of limitations
• Taxpayers whose three-year lookback is dirty AND who lack a documented reasonable-cause event AND have no statutory or administrative ground

The timing question

Even when you qualify, a refund claim must generally be filed within the statute of limitations: three years from the date the original return was filed, or two years from the date the penalty was paid, whichever is later. After that window, the refund is barred. That is the ordinary §6511 rule. The primary COVID-disaster claim window closed July 10, 2026; we do not treat it as a live countdown.