IRS Penalty Relief Made Easiter
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The IRS recently announced a change that could make it easier for some taxpayers to get penalty relief. Starting this summer, the IRS will begin automatically removing certain penalties for taxpayers who have a strong history of filing and paying on time. In the past, you generally had to contact the IRS and request the First Time Penalty Abatement. Under the new process, called the Automatic Exemption from Penalty, eligible taxpayers will not have to ask. You may qualify if you filed your returns and paid your taxes on time for the previous three years, or the previous 12 consecutive quarters if you file quarterly returns. The relief may apply to:
Here’s the important part: This does not erase the tax you owe. You will still be responsible for the unpaid taxes, interest, and any penalties that are not covered by the program. Not every taxpayer or tax return will qualify. And if you do not qualify for automatic relief, you may still be able to request penalty relief based on reasonable cause. The IRS will begin phasing out First Time Abate during summer 2026, and the new automatic process will fully replace it for eligible returns with original due dates on or after January 1, 2027. This is definitely good news for taxpayers who normally stay compliant and simply made a mistake. But it is still better to address tax problems early instead of waiting for penalties and interest to continue adding up. If you need assistance with a tax bill over $100,000, schedule your consultation to see what options are available to you. Karitsa Kerns, CPA, EA
I help private practice owners heal costly tax problems, reduce taxes legally, and prevent future tax issues with proactive tax strategies and expert tax resolution. DEADLINES September 15th -
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