Those who make partial payments toward their tax debt can reduce the accrued interest and penalties.
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On April 16, the Internal Revenue Service (IRS) explained the penalty relief options for taxpayers who missed the filing deadline for 2025. The IRS encourages taxpayers to file and pay taxes if they are able to do so. Those who make partial payments toward their tax debt can reduce the accrued interest and penalties.
Some taxpayers may also qualify for penalty relief. There is a First Time Abate administrative waiver for taxpayers who are in good standing with the IRS:
History of Tax Filing The first requirement is that you have filed for the past three years and no penalties were assessed. If you filed for years 2021, 2022 and 2023 and did not have any penalties, you may now qualify for First Time Abate relief.
Additional Requirements Taxpayers also may have to pass additional tests. They cannot have four or more Failure to Deposit penalty waiver codes and may not have a Daily Delinquency Penalty or an event-based filing requirement.
A First Time Abate Example Assume Taxpayer did not fully pay their taxes for year 2024. They called the IRS and requested penalty relief. The IRS gave Taxpayer a First Time Abate relief up to the date of the request. Six months later, Taxpayer made full payment on the taxes and called again. The IRS then granted another First Time Abate relief for the additional accrued penalty due from April 15 until that full payment.
The agency emphasizes that if you do not qualify for the First Time Abate relief, there is also a possibility for relief based on your facts and circumstances. If the IRS believes you are acting in good faith and have financial challenges, it may grant Reasonable Cause relief.
The IRS reminds taxpayers that it is still possible to file after the April deadline and receive a refund. For the 2021 tax year, an estimated 1 million taxpayers did not file but would have qualified for a refundable tax credit, most commonly the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC). Taxpayers with lower incomes should check with an adviser about potentially filing to receive a refundable tax credit. It is important to note that refunds may be delayed if more recent returns have not been filed, and any refund could be used to cover unpaid taxes, past-due child support or federal debts.
If you file for this credit, you can use the "Where’s My Refund?" tool on IRS.gov to check on the status of your refund. You will need your Social Security Number, your filing status and the exact dollar amount of your anticipated refund.
The American Legion’s Fund Development program is a way of establishing your legacy of support for the organization while providing for your current financial needs. Learn more about the process, and the variety of charitable programs you can benefit, at legion.org/plannedgiving. Clicking on “Learn more” will bring up an “E-newsletter” button, where you can sign up for regular information from Planned Giving.
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