IRS First-Time Penalty Relief: Automatic Starting in 2026

First-Time Penalty Relief

If you’ve ever filed or paid your taxes late, you may have been charged a failure-to-file or failure-to-pay penalty. For many years, the IRS has offered a “first-time abatement” (FTA) waiver that lets eligible taxpayers remove these penalties — but you had to call or write the IRS to request it.

Beginning in 2026, the IRS will automatically remove these penalties for taxpayers who qualify.

What is First-Time Abatement (FTA)?

FTA is a one-time penalty relief option for qualifying taxpayers. It applies to the most common IRS penalties:

• Failure to file

• Failure to pay

• Failure to deposit (for businesses with payroll taxes)

There is no dollar limit on how much can be removed.

Who qualifies?

Starting in 2026, the IRS will review your account automatically. To qualify, you must meet all of the following:

• You filed a tax return for the year the penalty was charged (individual, business, or payroll).

• You filed your past three years of required returns.

• You had no significant penalties in the previous three years. (Estimated-tax penalties don’t count.)

• If you owe back taxes, you’re in good standing — for example, on a payment plan and making payments on time.

FTA does not apply to:

• Accuracy-related penalties

• Estimated-tax penalties

• Estate, gift, information, or nonprofit returns

How does FTA work today?

Right now, you must request the waiver — usually by calling the IRS or filing Form 843. Online requests aren’t available yet.

What changes in 2026?

In 2026, the IRS will begin applying FTA automatically. That means:

• If you qualify, the IRS will remove the penalty without you asking.

• If the IRS misses it, your tax professional can still request it.

• If you had penalties in past years, your tax professional may still be able to request FTA as long as you’re within the time limits.

Why this matters

Millions of taxpayers qualify for FTA every year but never request it. Automatic relief means fewer unexpected balances, fewer IRS notices, and less stress for people who simply made a one-time mistake.

What you should do

• In 2026, check any IRS notice you receive — you may see a penalty removed automatically.

• If you were charged penalties in earlier years, ask your tax professional to review your IRS account for possible FTA relief.

• If you’re on a payment plan, stay current to keep your eligibility.

With this change, taxpayers will no longer miss out on valuable penalty relief that many never knew existed.

IRS First-Time Penalty Relief