AICPA Recommends IRS Expand and Adjust First Time Abatement Program

The AICPA submitted a comment letter to the IRS making recommendations to expand the first time abatement (FTA) program to additional tax and information returns and to allow taxpayers to substitute reasonable cause for automatically applied FTA relief. The IRS intends to automatically apply FTA relief for taxpayers when applicable; however, the AICPA recommends that IRS allow taxpayers to reverse FTA relief for valid reasonable cause statements, which would preserve taxpayers’ FTA relief for a later date. The recommendations would alleviate significant tax administrative burdens on the IRS, increase taxpayer awareness of the availability of FTA relief, and promote voluntary taxpayer compliance.