The agency will automatically exempt penalties for taxpayers with a three-year clean record starting in 2025.
The IRS will automatically waive late-filing and payment penalties of up to 25% for taxpayers with a three-year history of timely compliance. The change aims to reduce administrative burdens for both filers and the agency.
Previously, taxpayers had to request penalty relief through a separate appeal process, even if they had a clean record. The new policy, called the Automatic Exemption from Penalty, eliminates this step for eligible individuals.
The relief applies to returns filed beginning in 2025. The IRS stated the move reflects its commitment to simplifying tax payments and ensuring consistent treatment for compliant taxpayers.