IRS Data Study
How Often Does the IRS Remove or Abate Penalties? (2026 Data Study)
The short answer: the IRS removes penalties more often than most people expect. In FY2023 it assessed $65.57 billion in civil penalties and abated $13.01 billion of them — 19.8%, or roughly 1 in 5 penalty dollars reversed once taxpayers requested relief. Penalties are not final; abatement is available, but it usually has to be asked for.
You're looking at a penalty on an IRS notice, and it feels carved in stone. It isn't. Every year the IRS reverses billions of dollars in penalties — not as a favor, but because the taxpayer pushed back with a reason the law already recognizes.
The question "how often does the IRS remove or abate penalties" has a public answer, and the IRS publishes it. Below, the data table shows exactly how much was assessed versus abated — and the one line most people miss is how much of that reversal happened only because someone requested it.
Key findings: how often the IRS abates penalties
In FY2023, the IRS abated nearly one in five penalty dollars it had assessed. These are the headline figures from the IRS Data Book, written to be quoted directly:
- In FY2023, the IRS assessed 45,545,154 civil penalties totaling $65.57 billion ($65,574,052 thousand).
- It abated (reversed) 4,664,075 penalties worth $13.01 billion ($13,012,834 thousand) — 19.8% of every penalty dollar assessed.
- That works out to roughly 1 in 5 penalty dollars removed after taxpayers pushed back through abatement requests.
- On individual, estate, and trust income tax alone, the IRS assessed $44.44 billion in penalties and abated $2.85 billion — about 6.4% of those dollars in FY2023.
- By FY2025, the abatement share for individual/estate/trust income-tax penalties rose to 22.7% — $7.51 billion abated of $33.10 billion assessed.
- Total assessed civil penalties surged in FY2025 to $1.247 trillion ($1,247,074,030 thousand), with $1.210 trillion ($1,210,426,532 thousand) abated.
The data: IRS civil penalties assessed vs. abated
The IRS assessed $65.57 billion in civil penalties in FY2023 and abated $13.01 billion of that total. Here is the full breakdown by count and dollars:
| Measure | Number of penalties | Dollar amount |
|---|---|---|
| Civil penalties assessed | 45,545,154 | $65.57 billion |
| Civil penalties abated | 4,664,075 | $13.01 billion |
Zooming in on income tax paid by individuals, estates, and trusts — the category most readers of this page fall under — the assessed and abated figures shifted notably between FY2023 and FY2025:
| Measure | FY2023 | FY2025 |
|---|---|---|
| Penalty dollars assessed | $44.44 billion | $33.10 billion |
| Penalty dollars abated | $2.85 billion | $7.51 billion |
| Share of dollars abated | 6.4% | 22.7% |
Two things stand out. Across all tax types, roughly one in five penalty dollars was reversed in FY2023. And for individual filers specifically, the abatement share more than tripled by FY2025 — a sign that requesting relief pays off more often than the raw "you owe this" language on a notice suggests.
What this means for you
A penalty on your notice is a starting position, not a verdict. The IRS abated $13.01 billion in FY2023 because taxpayers asked and qualified — not because the agency volunteered to erase what it had charged.
Abatement generally rests on one of a few grounds. Reasonable cause is the biggest: a serious illness, a death in the family, a natural disaster, records destroyed, or another event genuinely outside your control that kept you from filing or paying on time. You document what happened and when.
The second is IRS error or incorrect written advice — the balance is simply wrong, a payment wasn't applied, or you followed guidance the IRS gave you in writing.
The third is first-time abatement (FTA): if you had a clean compliance record for the prior three years, the IRS can wipe a failure-to-file or failure-to-pay penalty on a single slip. Note a 2026 change — the IRS is rolling out an Automatic Exemption from Penalty (AEP) starting summer 2026 that applies this kind of relief automatically for many filers, with no request needed. Where AEP applies, you may not have to ask at all.
One caution the data doesn't show: abatement usually does not stop interest on the underlying tax. Interest is set by law and keeps running until the tax is paid. If a penalty is removed, the interest charged on that penalty comes off too — but interest on the tax itself stays. This is why acting early matters even when relief looks likely.
A worked example (hypothetical)
Say the IRS charges you a $4,000 failure-to-pay penalty on a $30,000 balance, and you've filed and paid on time for the last three years. You had a documented hospital stay during the period you fell behind.
On these facts you might request first-time abatement for one year and reasonable cause for the penalty tied to your illness. If the IRS agrees, that $4,000 penalty — plus the interest calculated on it — can be removed. The $30,000 in tax and the interest on the tax remain. You can estimate how penalties and interest stack up on a balance like this with our IRS penalty & interest calculator. This is an illustration only; your result depends entirely on your facts and the IRS's review.
Think a penalty on your notice could come off?
Nearly $13 billion in penalties was reversed in FY2023 — but almost none of it happened automatically. Send us your notice and an experienced tax professional will tell you, free, whether reasonable cause, first-time abatement, or an IRS error applies to your balance.
When you can handle this yourself — and when help changes the outcome
Plenty of abatement requests are DIY-friendly. If you have a clean three-year record and one late-payment penalty, first-time abatement is often a single phone call to the IRS or a short letter — no professional needed. A clearly-wrong balance you can prove with a payment confirmation is the same: gather the receipt and respond.
Where experienced help tends to change results: reasonable-cause cases that hinge on documentation and framing, penalties across multiple tax years, business or payroll penalties, an accuracy-related penalty tied to a disputed adjustment, or a situation where the penalty sits on top of a balance you can't pay in full. In those cases the order you fix things — returns first, then penalties, then the balance — changes what you ultimately owe. Our overview of penalty abatement walks through how those requests are built.
Terms on your notice, decoded
- Abatement — the IRS reversing a penalty it previously assessed, in whole or in part.
- Assessed — a penalty the IRS has formally charged and added to your balance.
- Reasonable cause — relief based on circumstances beyond your control that prevented timely filing or payment.
- First-time abatement (FTA) — one-time relief for a clean prior three-year compliance record.
- Automatic Exemption from Penalty (AEP) — the 2026 replacement for FTA that applies automatically for many filers, no request required.
- Failure-to-pay penalty — 0.5% per month on unpaid tax; far smaller than the 5%-per-month failure-to-file penalty.
Methodology & source
All figures on this page come directly from the IRS's own published statistics — no modeling, estimates, or projections were added.
FY2023 counts and dollar amounts are from IRS Data Book, Table 28 — Civil Penalties Assessed and Abated, by Type of Tax and Type of Penalty. FY2025 figures are from the corresponding IRS Data Book FY2025, Table 4-2. Dollar amounts published by the IRS in thousands are converted to billions/trillions for readability (for example, $65,574,052 thousand = $65.57 billion). Percentage shares are simple arithmetic on the published dollar figures (abated dollars ÷ assessed dollars). "Fiscal year" refers to the federal fiscal year (October 1–September 30).
Source: IRS Data Book — Civil Penalties Assessed and Abated by Type of Tax and Type of Penalty (Table 28). For the relief programs referenced, see the IRS's Penalty Relief page.
Cite this study
Journalists, researchers, and bloggers are welcome to cite these figures. Please use the attribution line below and link back to this page:
"In FY2023 the IRS assessed $65.57 billion in civil penalties and abated $13.01 billion of them — about 19.8%, or roughly 1 in 5 penalty dollars — according to IRS Data Book figures compiled by Clarity Tax Relief."
Source: Clarity Tax Relief — How Often Does the IRS Remove or Abate Penalties? (2026 Data Study)
Frequently asked questions
How often does the IRS remove or abate penalties?
The IRS reverses a meaningful share of the penalties it charges. In FY2023 it abated $13.01 billion of the $65.57 billion in civil penalties it assessed — about 19.8%, or roughly 1 in 5 penalty dollars. Abatement is not automatic; taxpayers generally have to request it.
What are the main ways to get an IRS penalty removed?
Three paths account for most abatements: reasonable cause (illness, disaster, or events beyond your control), IRS error or incorrect written advice, and first-time abatement for an otherwise clean compliance record. Starting summer 2026, an Automatic Exemption from Penalty replaces first-time abatement for many filers — applied automatically, with no request needed.
Does requesting penalty abatement stop interest?
Not usually. Interest is charged by law and generally keeps accruing until the tax is paid. If a penalty is removed, the interest charged on that penalty is removed too, but interest on the underlying tax stays. Penalties and interest continue to grow while a request is pending.
Is penalty abatement guaranteed if I ask?
No. Abatement depends on your specific facts and the IRS's review; roughly 1 in 5 penalty dollars was abated in FY2023, not all of them. A request with documentation supporting reasonable cause or a clean compliance history has a better chance than an unsupported one. No outcome is guaranteed.
Your next 24 hours
- Find the penalty line on your notice. Note the penalty type (failure-to-file, failure-to-pay, accuracy-related) and the exact dollar amount — that determines which relief applies.
- Gather your compliance history. Pull your last three years of returns and any records that explain a late filing or payment — hospital dates, disaster declarations, proof of a payment that didn't post.
- Get a free case review. Have an experienced tax professional confirm whether reasonable cause, first-time abatement, or an IRS error fits your balance before you pay it. Use the 2-minute form or call (888) 825-7779.
This guide is general information, not tax or legal advice for your specific situation. Eligibility for IRS programs depends on individual facts and circumstances; no outcome is guaranteed.