Penalty Relief due to First Time Abate

[bmwdrvr]

I understand a waiver of penalties and interest may be available via a first time abatement, provided there is a clean prior filing history. I'm in the process of filing 2020 - 2023 returns. The 2020 return has a refund and thus no penalty. For 2021 I owe tax ($20k) and presumably penalties/interest for filing late and paying late. Am I  eligible for a waiver of the 2021 penalty as a first time abatement? 

[Mike9241]

Interest cannot be abated but if penalties are abated then the interest on them will disappear.

You must have filed a tax return for at least three years prior to when you got a penalty if you were required to. You must be in good compliance, which means you can’t have received another penalty over the last three years.

personally i don't think you meet the IRS criteria, 2020 -, 2022 and maybe 2023 have not been filed. the 2020 refund would likely go against the 2021 liability. How do you plan to pay it off? If the IRS were to abate 2021penalty through the date you file, penalties will begin again for late payment unless you pay 100% of the amount due. you say nothing about 2022 or 2023 so if you owe there would be late filing and payment penalties over "the last 3 years". any refunds would be seized to apply to unpaid taxes for prior years. 

you have nothing to lose by requesting abatement but the longer you wait, if denied, you'll get a to a point where the IRS will levy or seize whatever assets you have and/or garnish your wages.

[rjs]

Go to the following link on the IRS web site for details on first time abate. Note that you cannot request first time abate until after you file the tax return and get an IRS notice that imposes a penalty.

Penalty Relief due to First Time Abate or Other Administrative Waiver

[bmwdrvr]

I am mailing the 2020 return tomorrow, just under the deadline to forfeit the refund. The 2021 return will be mailed shortly with a check for the $20k I owe, or whatever the balance is after applying the refund from 2020. I owe $2k for 2022 and have a loss in 2023 to apply to subsequent returns, so my only concern at present is 2021.