Compliance
Compliance Simplified: New Penalty Relief & Secure Sharing with IRS Tools
Stop worrying about penalties—learn how the Automatic Exemption from Penalty and digitally authenticated Tax Compliance Report are changing the game for US taxpayers.
By NomadicTax Research Team • 5-7 min read • September 10, 2026
## Automatic Exemption from Penalty (AEP)
The IRS recently rolled out the **Automatic Exemption from Penalty** (AEP), a program designed to replace the First-Time Abate relief. If you have a strong compliance record, you may receive relief automatically—no need to file a request. ([irs.gov](https://www.irs.gov/newsroom/irs-simplifies-penalty-relief-introduces-automatic-process-for-eligible-taxpayers?utm_source=openai))
### Who Qualifies
- **For annual filers**: Clean filing and payment history for the past **three tax years**, including tax year 2025. ([irs.gov](https://www.irs.gov/newsroom/irs-introduces-new-automatic-penalty-relief-process?utm_source=openai))
- **For quarterly filers**: Timely filing and payment for the prior **12 consecutive quarters**. ([irs.gov](https://www.irs.gov/newsroom/irs-simplifies-penalty-relief-introduces-automatic-process-for-eligible-taxpayers?utm_source=openai))
- **Covered penalties** include failure-to-file, failure-to-pay, and failure-to-deposit (for businesses). ([irs.gov](https://www.irs.gov/newsroom/irs-introduces-new-automatic-penalty-relief-process?utm_source=openai))
### Key Implications & Strategy
- AEP **automatically applies** to eligible returns: no need to request First-Time Abate where AEP applies. ([irs.gov](https://www.irs.gov/newsroom/irs-simplifies-penalty-relief-introduces-automatic-process-for-eligible-taxpayers?utm_source=openai))
- If you're unsure whether a penalty notice has incorrectly been assessed, or believe you qualify, contact the IRS with your notice info. ([taxpayeradvocate.irs.gov](https://www.taxpayeradvocate.irs.gov/news/tax-tips/tips-for-taxpayers-who-may-qualify-for-automatic-penalty-relief/2026/08/?utm_source=openai))
- Keep strong records: proof of timely returns and payments, especially for income and estimated taxes.
## Digitally Authenticated Tax Compliance Report
Another new tool: IRS offers a **digitally authenticated Tax Compliance Report** via your online individual account. Great for sharing with lenders, employers, or official agencies. ([irs.gov](https://www.irs.gov/newsroom/irs-launches-digitally-authenticated-tax-compliance-report?utm_source=openai))
### What It Does & Why It Matters
- Each report includes an **IRS-issued digital certificate** so the recipient can verify it's legitimate. No more dubious paper copies or potential forgery concerns. ([irs.gov](https://www.irs.gov/newsroom/irs-launches-digitally-authenticated-tax-compliance-report?utm_source=openai))
- Full **control & access**: you can download it whenever needed through your IRS Individual Online Account. ([irs.gov](https://www.irs.gov/newsroom/irs-launches-digitally-authenticated-tax-compliance-report?utm_source=openai))
- Use case: job applications, loan requests, or when qualifying for programs that require proof of tax compliance.
## Action Plan for Compliance
- If you have received a **penalty notice** recently, review whether AEP should have applied. If AEP was in effect at the time, you may call or respond using the notice number. Keep documentation of payment and filing dates.
- Ensure your contact info and online account with IRS are current—these tools depend on your access.
- For businesses, particularly with 2026 estimated payments, confirm you're up to date with filings so you meet quarterly compliance conditions.
- Integrate checks into your calendar—reminders for filing deadlines, payments, etc.—to maintain eligibility for AEP.
These recent changes underscore a clear message: the IRS is making it easier for compliant taxpayers to stay compliant, while cutting administrative burden. Take advantage of them.