Renner Individual News; July 28, 2026
The Internal Revenue Service recently announced a new automatic process to provide penalty relief and reduce burdens for taxpayers with a history of timely compliance.
Automatic Exemption from Penalty (AEP) replaces the long-standing First Time Abate administrative relief program.
AEP, expected to begin this summer, is meant to reduce the need for you to request assistance. It applies to eligible original returns beginning with tax year 2025 and 2026 quarterly returns, as well as future tax periods.
IRS Chief Executive Officer Frank J. Bisignano said in a release that AEP makes the payment of taxes owed simpler and more consistent.
“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,” Bisignano said.
You’ll qualify for AEP if you have a history of timely filing your return and paying any tax due in the three prior years (or 12 consecutive quarters for quarterly returns). If you qualify, penalties will not be assessed during processing for failure to file, failure to pay and failure to deposit.
You don’t need to take any action to get AEP. If eligible, the IRS will apply AEP and issue a notice confirming that the relief was granted.
Not all returns will be eligible for AEP. Information returns and returns that are filed only in response to specific transactions or infrequent events (such as Form 706, U.S. Estate Tax Return or Form 709 Gift Tax Return) generally are not eligible.
The IRS will begin phasing out First Time Abate and transitioning to AEP this summer. During this transition, you may still receive penalty notices for eligible tax year 2025 and 2026 quarterly returns.
If you believe you qualify, you may contact the IRS to request First Time Abate. AEP provides relief automatically and will replace First Time Abate for eligible returns with original due dates on or after Jan. 1, 2027.
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