First Time Abatement Is Changing: What Doctors Should Know

Doctors who pay a tax penalty often assume there is nothing they can do about it. Fortunately, the IRS has historically offered a relatively generous administrative waiver called First Time Abatement (FTA).

Beginning in 2026, the IRS is transitioning FTA to a new system called the Automatic Exemption from Penalty (AEP). The underlying lesson is the same: if you have a good compliance history, one mistake may not have to cost you thousands of dollars.