Cheat Sheet #5: The Penalty Relief You're About to Request May Already Be Granted
The IRS now applies first-time abatement automatically. Practitioners who still file the request by hand are working a case the system already closed.
The IRS changed how first-time abatement works, and the change is easy to miss because nothing about the penalty notice looks different.
Under Administrative Penalty Relief, the system now applies the waiver on its own for qualifying accounts. No request, no letter, no call. A practitioner who files the request anyway spends an hour on relief the client already received — and a practitioner who assumes the relief is automatic for every client gets a different surprise, because the eligibility screen is narrower than most people expect.
This one-page checklist covers the qualification test, which return types and penalties fall inside it, the specific exclusion that trips up payroll clients, and what to do for the clients who don’t qualify.
One thing worth flagging before you download it: automatic relief can quietly consume the waiver your client would rather save for a future year. Section 5 explains when that matters.
Today’s Deep Dive goes further — the IRM authority behind each qualification element, how automatic relief interacts with reasonable cause, and the sequencing decision when a client qualifies for both. Paid subscribers have it in their inbox.
Subscribe for $179/year (or $19/month) to get every Tuesday Deep Dive. The founding tier — $199/year, capped at 20, monthly group Q&A — closes this Friday, July 31, and does not reopen.
