FinishLine Tax Solutions is a Plano, Texas-based tax resolution firm that has provided tax debt and tax relief services since 2017. With a team that includes certified public accountants, IRS tax attorneys, and licensed enrolled agents, FinishLine Tax Solutions supports individuals and businesses navigating complex federal and state tax matters. Over the years, the firm has resolved more than $100 million in client liabilities while also emphasizing education around tax compliance, penalty relief, and repayment options.
FinishLine Tax Solutions is familiar with a wide range of IRS programs, including the Fresh Start initiatives and penalty abatement options that may reduce financial strain for compliant taxpayers. Its professionals regularly assist clients who face penalties for filing or payment errors, helping them understand available relief pathways and the steps required to regain good standing with taxing authorities. This background provides relevant context for understanding how the IRS One-Time Forgiveness program works and how taxpayers may pursue relief under this framework.
An Overview of the IRS One Time Forgiveness Program
The IRS One-Time Forgiveness program, also known as First-Time Penalty Abatement (FTA), provides taxpayers with a path to substantial relief if they face circumstances beyond their control or make honest mistakes. Compliant taxpayers who are behind on taxes with an otherwise clean tax record often qualify. The relief spans three basic penalty types: failure-to-pay, failure-to-file, and failure-to-deposit.
Taxpayers will find that the amount that this program saves varies depending on the type of penalty. The failure-to-pay penalty stands at 0.5 percent per month. While this seems small, it can easily add up to a substantial amount over time. By contrast, the failure-to-file penalty can reach up to 5 percent of unpaid taxes for each month past the due date (with 25 percent as the cap). The FTA helps abate these penalties, which often run into hundreds or thousands of dollars. Keep in mind, it does not address the underlying tax debt, which taxpayers must still pay in full.
Qualifying for FTA has various requirements. First, the taxpayer must have all required returns filed (or filed for a time extension). Any outstanding unfiled returns automatically prevent the IRS from granting relief. A clean compliance history means zero penalties across the three years before the year in which one applies for the FTA. Past penalties that the abatement removed are permissible.
Additionally, taxpayers must pay or arrange to pay any taxes due. They can pay them off in full or incrementally via an IRS-approved payment plan.
Moreover, taxpayers must take prompt action upon receiving a penalty notice. Clear, concise, and appropriate communication lets the IRS know that taxpayers have taken the situation seriously and will take the necessary actions to rectify it.
Those unable to qualify for relief under the FTA program may have penalty relief eligibility under reasonable cause provisions. These take into consideration unavoidable circumstances such as natural disasters, serious illness, and events beyond one’s control, and provide leeway in meeting tax obligations.
In certain cases, the IRS has granted penalty relief waivers across larger groups, as when the pandemic delayed IRS-issued guidance (via automated collection notices). Should one experience FTA denial and wish to appeal the decision, the route is through the IRS Independent Office of Appeals, which, in some instances, can lead to a court adjudication.
Many people who receive one-time forgiveness still owe back taxes. To resolve this separate issue, the most common route is to set up an IRS Payment Plan. It spreads payments over several months or years, with the taxpayer making small, regular payments. Taxpayers may also consider applying to have owed taxes placed in currently not collectible (CNC) status, or submit an offer in compromise, which involves a partial payment that settles the entire debt.
When facing IRS penalties, taxpayers should contact an accredited tax resolution firm, such as FinishLine Tax Solutions. These firms coordinate between individuals and businesses facing serious tax issues and the IRS and state taxing authorities. Additionally, their expertise helps taxpayers navigate their circumstances and IRS rules more seamlessly.
About FinishLine Tax Solutions
FinishLine Tax Solutions is a Plano, Texas-based tax resolution firm established in 2017. The company employs certified public accountants, IRS tax attorneys, and enrolled agents who assist individuals and businesses with federal and state tax issues. Its services include penalty abatement, payment plan negotiation, audit support, and broader tax education and planning. FinishLine Tax Solutions has earned multiple industry recognitions and regularly contributes insight on tax-related topics through national media outlets.