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posted Sep 17, 2025 9:45:20 AM

Penalties and interest

Hopefully this is the correct forum for these questions 

1. can I request to have tax penalty removed/abated? If so, how do I do that, what are the qualifications and how likely is it to happen?

2. I noticed in the list of interest rate on back taxes owed, the interest rate has steadily increased to the point where my balance owed is actually INCREASING in spite of my continuing to pay on the payment plan. Can this interest rate be negotiated down? These rates seem predatory. 

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1 Replies
Employee Tax Expert
Sep 17, 2025 10:30:23 AM

You are able to request penalty relief. The most common is the First Time Abate process with the IRS. To qualify, generally you must have what is considered a history of good tax compliance. The IRS defines this as:

  • Filed the same return type, if required, for the past 3 tax years before the tax year you received the penalty.
  • Didn't receive any penalties during the prior 3 years, or any penalty was removed for an acceptable reason other than First Time Abate

Generally, to apply, you can call the number on the IRS notice you received relating to the penalty. 
More information about IRS Administrative Penalty Relief (including First Time Abate) is available here: IRS Administrative Penalty Relief 

Interest rates are adjusted each quarter and are set per federal law. Current and past interest rates and how they are calculated is available on the IRS website here: IRS Quarterly Interest Rates