The IRS is making a change that could save some taxpayers from having to ask for penalty relief that they already qualify to receive.

The agency announced that it will begin automatically providing certain penalty relief during return processing to taxpayers with a history of filing and paying on time. The new process, called Automatic Exemption from Penalty, or AEP, will replace the long-standing First Time Abate program.

First Time Abate has been around for more than two decades. The IRS implemented the administrative waiver in 2001 for tax periods ending after December 31, 2000. It became the most common form of administrative penalty relief, allowing eligible taxpayers to remove certain failure-to-file, failure-to-pay, and failure-to-deposit penalties if they had a three-year history of timely compliance. But FTA was not automatic. Taxpayers generally had to know the relief existed and ask the IRS for it, which meant the benefit often depended on awareness, access, or professional help rather than eligibility alone.

Under the new AEP process, eligible taxpayers will not have to call the IRS, send a letter, or otherwise request relief. If IRS records show that the taxpayer qualifies, the agency will automatically apply the relief during return processing and send a notice confirming that the relief was granted.

When The New Relief Begins

The change is expected to begin this summer. AEP will apply to eligible original returns beginning with tax year 2025 returns and 2026 quarterly returns, as well as future tax periods.

To qualify, taxpayers generally must have timely filed the same type of return and paid any tax due for the prior three years. For quarterly filers, the lookback period is 12 consecutive quarters.

If the taxpayer qualifies, the IRS will not assess certain penalties during........

© Forbes