IRS automatic penalty relief: What practitioners need to know

The IRS announced a new Automatic Exemption from Penalty (AEP) process that will provide certain penalty relief automatically for eligible taxpayers with a history of filing and paying on time. AEP is expected to begin in summer 2026 and will replace the long-standing First Time Abate (FTA) administrative waiver for eligible returns with original due dates on or after Jan. 1, 2027.

Under AEP, eligible taxpayers will not need to call or write the IRS to request relief. If the