Penalty Abatement for Virginia Taxpayers
For Northern Virginia individuals and business owners, penalties and interest have a way of outgrowing the original tax bill.
A balance that started as a manageable amount can double (or worse) once failure-to-file and failure-to-pay penalties are added, and interest continues to accrue on top of both. The tax itself may already be paid or arranged into a payment plan, yet the penalties remain, sitting on the account and continuing to grow.
Many taxpayers do not realize that penalty relief is available, or assume they do not qualify. Left unaddressed, penalties and interest can turn a resolved tax issue into an ongoing balance that takes years longer to pay off than necessary.
JBD Tax Resolution provides penalty abatement help for individuals and businesses across Northern Virginia, reviewing your account for every avenue of IRS penalty abatement you may qualify for.
What Is IRS Penalty Abatement?
IRS penalty abatement is the process of requesting that the IRS reduce or remove penalties assessed against a tax account. It does not eliminate the underlying tax owed, but it can significantly reduce the total balance, since penalties and the interest charged on them often make up a substantial portion of what is owed.
Penalty abatement, sometimes referred to as tax penalty abatement, generally falls into two categories: relief based on a clean compliance history, and relief based on the specific circumstances that caused the penalty. Both are worth reviewing before assuming a penalty is simply owed as charged.
First-Time Penalty Abatement vs. Reasonable Cause Relief
First-time penalty abatement, often called FTA, is available to taxpayers with a clean compliance history. If you have not been assessed a penalty in the prior three years and are current on filing and paying, you may qualify for IRS first-time penalty abatement on a failure-to-file, failure-to-pay, or failure-to-deposit penalty, regardless of the reason the penalty occurred.
In July 2026, the IRS began phasing in a newer version of this same relief, called Automatic Exemption from Penalty, or AEP. The qualification is unchanged, three years of timely filing and paying, but AEP removes the need to request it.
Under FTA, a penalty is assessed first and then removed once you ask for it; under AEP, an eligible penalty is never assessed in the first place, and the IRS notifies you directly. AEP already covers eligible 2025 tax year returns and 2026 quarterly returns, and is set to fully replace FTA for returns due on or after January 1, 2027. Until then, both programs exist side by side, so a penalty that AEP does not catch automatically can still be resolved by requesting FTA directly.
Reasonable cause penalty abatement works differently. It applies when a specific circumstance, such as a serious illness, a natural disaster, the death of an immediate family member, or an inability to obtain necessary records, prevented timely filing or payment. Reasonable cause relief does not require a clean compliance history, but it does require documentation showing why the penalty should not apply.
Many taxpayers qualify for one but not the other, and some qualify for both, which affects the order in which relief should be requested.
Penalty Abatement Representation for Individuals and Businesses
If you have been searching for an IRS penalty abatement attorney, it is worth knowing that Enrolled Agents are also licensed to prepare and submit penalty abatement requests directly with the IRS.
Once you engage JBD Tax Resolution for penalty abatement, the process moves through three stages:
- Account and penalty review. We review your IRS account transcript to identify every penalty assessed, when it was assessed, and which type of relief it may qualify for.
- Case preparation. We determine whether first-time abatement, reasonable cause, or both apply, and prepare the request, including Form 843 where appropriate, with supporting documentation.
- Submission and follow-up. We submit the request and handle any IRS correspondence or follow-up needed to reach a decision.
Gain access to IRS penalty relief you may not have known you qualified for, without having to determine on your own which form, which argument, and which supporting documents the IRS expects to see. Instead of an ongoing balance that keeps growing, you get a formal request built to give you the best chance at approval.
Instead of an open-ended audit hanging over you, you get a defined process, a single point of contact, and an outcome that has been reviewed for accuracy before you are asked to accept it.
Filing IRS Form 843 for Penalty and Interest Abatement
Form 843 is the IRS form used to formally claim a refund or request an abatement of certain taxes, penalties, interest, and fees. For penalty abatement, IRS Form 843 is most commonly used when a penalty has already been assessed and, in some cases, already paid, and the taxpayer is requesting that it be reduced, removed, or refunded.
Filing Form 843 is not the only route to penalty relief. A straightforward first-time abatement request can sometimes be handled by phone or in a written request referencing the correct IRS notice.
Form 843 becomes the more appropriate route when an IRS penalty abatement request needs to be formally documented, when IRS interest abatement is being requested, or when the penalty was already paid and a refund is being sought.
If you are looking up where to send Form 843, the answer depends on the type of tax involved and where the related return was originally filed.
First-Time Penalty Abatement vs. Reasonable Cause Relief
First-time penalty abatement, often called FTA, is available to taxpayers with a clean compliance history. If you have not been assessed a penalty in the prior three years and are current on filing and paying, you may qualify for IRS first-time penalty abatement on a failure-to-file, failure-to-pay, or failure-to-deposit penalty, regardless of the reason the penalty occurred.
In July 2026, the IRS began phasing in a newer version of this same relief, called Automatic Exemption from Penalty, or AEP. The qualification is unchanged, three years of timely filing and paying, but AEP removes the need to request it.
Under FTA, a penalty is assessed first and then removed once you ask for it; under AEP, an eligible penalty is never assessed in the first place, and the IRS notifies you directly. AEP already covers eligible 2025 tax year returns and 2026 quarterly returns, and is set to fully replace FTA for returns due on or after January 1, 2027. Until then, both programs exist side by side, so a penalty that AEP does not catch automatically can still be resolved by requesting FTA directly.
Reasonable cause penalty abatement works differently. It applies when a specific circumstance, such as a serious illness, a natural disaster, the death of an immediate family member, or an inability to obtain necessary records, prevented timely filing or payment. Reasonable cause relief does not require a clean compliance history, but it does require documentation showing why the penalty should not apply.
Many taxpayers qualify for one but not the other, and some qualify for both, which affects the order in which relief should be requested.
Why Virginia Taxpayers Trust JBD Tax Resolution
Neil is an IRS Enrolled Agent with over 11 years of experience in tax resolution and accounting, licensed to represent taxpayers directly before the IRS.
Personable
He’s very personable. Meaning, he sort of comes across as a good neighbor and or someone that you’d want as a neighbor. He tries to find out a little bit about your background so that he can relate to what kind of work you’re doing. And he shows a real interest in what his clients are all about.
Recent Tax & Accounting Client
Responsive
Communication is good. If we’re meeting in person versus online, he’ll email me with what I need to know, when to come over and give me all the links that I need and he gives me milestones of how things are going.
Recent Tax & Accounting Client
Knowlegable
Neil’s knowledge of taxes is Outstanding. He is the best accountant we have ever had. Only very skilled accountants can prepare the K-1 accurately and Neil has that knowledge and the ability to complete the K-1 perfectly.
Recent Tax & Accounting Client
Frequently Asked Questions
Penalty Abatement for Northern Virginia Taxpayers
JBD Tax Resolution provides penalty abatement help for taxpayers throughout Northern Virginia, including Fairfax, Arlington, Prince William, and Loudoun County.
If penalties and interest have built up on an IRS account, your full history is reviewed for first-time abatement, reasonable cause relief, and any other tax penalty relief in Virginia you may qualify for.