Compliance
Navigating the Farmers’ & Fishermen’s Penalty Waiver for Underpayment in 2025
A recent IRS policy gives eligible farmers and fishermen relief from penalties for underpaying their 2025 estimated taxes—if certain conditions are met.
By NomadicTax Research Team • 5-8 min read • May 8, 2026
## Summary
On **April 20, 2026**, through Notice 2026-24, the IRS announced a **waiver of the addition to tax under IRC § 6654** for qualifying farmers and fishermen who underpaid their estimated taxes for **tax year 2025**. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-17.pdf?utm_source=openai)) If certain requirements are satisfied, the usual penalty won’t apply. This relief addresses delays caused by software or form errors tied to the Qualified Business Income Deduction (QBID) instructions and delays in completing returns. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-17.pdf?utm_source=openai))
## Who Qualifies
To be eligible, a taxpayer must:
- Be an **individual farmer or fisherman** whose **gross income** is at least **two-thirds** from farming/fishing during either tax year 2025 or 2024. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-17.pdf?utm_source=openai))
- File a **calendar-year 2025 tax return** and pay **all tax due** by the ordinary due date of **April 15, 2026**. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-17.pdf?utm_source=openai))
## What Is the Relief?
- The IRS will **waive the addition to tax** (penalty) under § 6654 for underpayment of estimated tax for qualifying farmers/fishermen if they meet the filing and payment requirement. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-17.pdf?utm_source=openai))
- The waiver is **automatic** for those who qualify and do not already include an addition to tax under § 6654 on their 2025 return. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-17.pdf?utm_source=openai))
- If they did file the penalty, there is a process to **request abatement** via **Form 843**, with specific instructions (write “Request for Relief under Notice 2026-24” etc.). ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-17.pdf?utm_source=openai))
## Why This Matters
- Many farmers and fishermen were **unaware** or faced delays because of software or forms related to QBID rules. Those issues led to inability to file or fully compute returns by earlier deadlines. This waiver provides needed equity. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-17.pdf?utm_source=openai))
- It avoids unnecessary penalties that are typically harsh for taxpayers whose income fluctuates significantly year to year.
## Example Situation
Jane is a farmer with 75% of her gross income from farming in 2024 and 2025. She failed to make enough estimated tax payments but files her 2025 return by April 15, 2026, and fully pays the tax due. Because she meets all criteria, **she pays no § 6654 penalty** otherwise imposed. If she’d already filed reporting the penalty, she can use **Form 843** to claim a refund/relief.
## Steps to Take If You’re Affected
1. Confirm percentage of income from farming/fishing.
2. Check that your Form 8995 (QBID) was required and you couldn’t complete it earlier due to form/software delays.
3. Make sure you’ve filed by April 15, 2026 and paid all taxes due for 2025.
4. If you incurred the penalty improperly, complete **Form 843** with proper designation.
## Takeaway
This waiver is a **compliance relief** aimed at equity for those in agriculture or fisheries experiencing tax administration issues. If you qualify, use this opportunity to avoid penalties—and if you already paid them, seek an abatement.