IRS’ New Automatic Penalty Relief Program

If you have a history (3 years) of paying and filing your federal taxes on time, a new automatic penalty relief program can abate penalties; you don’t have to request relief. Called the Automatic Exemption from Penalty (AEP) is expected to be up and running this summer. AEP, which will replace First Time Abatement, will apply to failure to file, failure to pay, and failure to deposit. During a transition period, AEP will apply to penalty notices for 2025 and 2026 employer quarterly returns. AEP will then apply to all eligible returns (not all qualify) with original due dates on or after January 1, 2027. The IRS has posted some details about AEP. #IdeaoftheDay