What Is Penalty Abatement?

Penalty abatement is a reduction or elimination of IRS penalties you've been charged — for late filing, late payment, or underpayment. The most accessible type is "First-Time Penalty Abatement," which the IRS grants to taxpayers with a clean compliance history (no penalties in the prior three years). You can also request abatement based on "reasonable cause" — like a serious illness, natural disaster, or IRS error. Call the IRS or submit a written request. Abatement doesn't eliminate interest on unpaid taxes.