A penalty is on the account. Which door removes it?
There are three doors off a penalty, and the IRS considers them in a fixed order (IRM 20.1.1.3 ¶(1)): the Automatic Exemption from Penalty first, since it requires nothing from the taxpayer at all; First-Time Abate second, a one-time administrative waiver keyed to a clean three-year compliance history; and reasonable cause last, which is the only door that requires an actual factual argument.
AEP itself is not permanent — the automatic exemption sunsets January 1, 2027 for the return types it covers, after which First-Time Abate and reasonable cause become the only two doors left for those returns. Knowing which door a specific penalty is even eligible for, before spending time building a reasonable-cause argument a return didn’t need, is most of what this hub is for.
Start with the tool
- Penalty Abatement Analyzer
Check First-Time Abate and Automatic Exemption from Penalty eligibility, and rank reasonable-cause arguments.
Calculators
- Penalty Relief Router
Route a penalty across AEP, First-Time Abate, and reasonable cause in one pass, with the IRM/IRC citation shown at every branch — the ITA-1 engine surfaced against a penalty-relief ruleset.