IRS to automatically provide penalty relief for eligible taxpayers

The IRS announced it will soon automatically abate three types of penalties — failure to file, failure to pay, and failure to deposit — for taxpayers with a history of timely compliance.

The new process, called automatic exemption from penalty (AEP), replaces the long-standing first-time abatement (FTA) process, the IRS said in a recent news release.

“By automatically applying penalty relief, the IRS recognizes that taxpayers who historically pay on time should not have to make a formal request for relief that is routinely granted,” IRS CEO Frank Bisignano said in the release.

AEP, expected to begin this summer, will apply to eligible original returns beginning with tax year 2025 and 2026 quarterly returns, as well as future tax periods, the IRS said.

Taxpayers qualify if they have a history of timely filing the return and paying any tax due in the three prior years (or 12 consecutive quarters for quarterly returns). Read more.