First Time Abatement vs Reasonable Cause
Choosing the right IRS penalty relief strategy can save you thousands. Here's an expert comparison to help you decide which option is best for your situation.
Quick Decision Guide
Choose First Time Abatement If:
- ✅ Clean 3-year tax compliance history
- ✅ Want 100% penalty removal
- ✅ Need fast processing (2-8 weeks)
- ✅ Want highest success rate
Choose Reasonable Cause If:
- ✅ Don't qualify for FTA
- ✅ Have documented circumstances beyond control
- ✅ Medical emergency, natural disaster, etc.
- ✅ Can provide strong supporting evidence
Detailed Comparison
| Criteria | First Time Abatement | Reasonable Cause |
|---|---|---|
| Success Rate | Very High | Good |
| Processing Time | 2-8 weeks | 6-12 weeks |
| Documentation Required | Minimal | Extensive |
| Eligibility Requirements | Strict (3-year clean history) | Flexible (case-by-case) |
| Penalty Removal | 100% (if approved) | Varies (partial to 100%) |
| Can Be Used Again | No (once per penalty type) | Yes (with valid reasons) |
Advanced Strategy: Using Both Methods
In some cases, you can use both strategies strategically:
Multiple Tax Years
Use FTA for qualifying years, then Reasonable Cause for years that don't qualify for FTA.
Different Penalty Types
Apply FTA to failure-to-file penalties and Reasonable Cause to estimated tax penalties on the same return.
Real-World Examples
Example 1: Perfect FTA Candidate
Situation: Small business owner filed and paid taxes on time for 2021, 2022, 2023, but was 2 months late filing 2024 return due to busy season.
Best Strategy: First Time Abatement - Clean 3-year history guarantees qualification.
Result: 100% penalty removal in 4 weeks.
Example 2: Reasonable Cause Winner
Situation: Taxpayer has some late filings in past 3 years but had heart attack during tax season, hospitalized for 6 weeks.
Best Strategy: Reasonable Cause - Medical emergency with hospital records.
Result: 100% penalty removal in 8 weeks with proper medical documentation.