The IRS is replacing the First Time Abate penalty waiver, which taxpayers had to request, with Automatic Exemption from Penalty (AEP), which automatically grants penalty relief to eligible taxpayers. You may qualify if you’ve filed returns and paid taxes on time for the past three years (or 12 consecutive quarters if you file quarterly). AEP applies to failure-to-file, failure-to-pay and failure-to-deposit penalties. Any taxes and interest due must still be paid. AEP applies to eligible 2025 original returns, 2026 quarterly returns and future tax periods. During the transition, some eligible taxpayers may still receive penalty notices for 2025 and 2026 returns. Contact us with any questions.
