The IRS has introduced one of the most significant changes to penalty relief administration in years. Beginning in Summer 2026, the agency is transitioning away from its long-standing First Time Abate (FTA) request process and replacing it with a new system called Automatic Exemption from Penalty (AEP). For many taxpayers, this means qualifying penalty relief will be applied automatically rather than requiring a formal request.
Why the Change Matters
Historically, taxpayers who qualified for First Time Abate relief had to contact the IRS, submit correspondence, or file Form 843 to request removal of certain penalties. Many eligible taxpayers either were unaware of the program or failed to take advantage of it, resulting in unnecessary penalty payments.
The new AEP program is designed to streamline the process by automatically identifying eligible taxpayers and preventing qualifying penalties from being assessed in the first place.
In addition to the above, the IRS has additional penalty relief provisions and amnesty programs. If you need assistance with penalty abatement, please contact our office.
