IRS Will Automatically Issue First‑Time Penalty Relief Starting in 2026

by Gina Gatchell | Nov 29, 2025 | Articles

IRS Will Automatically Issue First‑Time Penalty Relief Starting in 2026

For decades, many taxpayers have been penalized by the IRS for simple one‑time mistakes—filing a return late, paying after the deadline, or missing a payroll deposit—often without realizing that penalty relief was available. Beginning in 2026, that is about to change in a meaningful way.

The IRS has announced that it will automatically apply First‑Time Abatement (FTA) penalty relief for eligible taxpayers, eliminating the need to call the IRS, write a letter, or file a formal request. This shift marks an important modernization in how the IRS administers penalty relief and could benefit millions of individuals and businesses who previously missed out simply because they didn’t know they had to ask.

What Is First‑Time Abatement?

First‑Time Abatement (FTA) is an administrative waiver the IRS has offered since 2001. It allows taxpayers with a strong compliance history to have certain penalties removed when they make a one‑time mistake.

Historically, taxpayers could qualify for FTA but only received the relief if they requested it—by phone or in writing, often after receiving a penalty notice. For many taxpayers, especially those without a tax professional, that step never happened.

Starting in 2026, the IRS will change that approach.

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