Not every IRS update means more paperwork. New automatic penalty relief is already changing how some taxpayers receive a break, while other efforts are focused on strengthening taxpayer rights during examinations and appeals.
You Have Rights When Dealing with the IRS
Taxes come with plenty of rules about what taxpayers are required to do. File on time. Pay on time. Keep good records. Respond when the IRS comes calling.
What sometimes gets lost in all of those responsibilities is the other side of the equation: taxpayers have rights, too.
Those rights can become especially important when something goes wrong. Maybe a return or payment was late for the first time. Maybe you disagree with an IRS decision. Or maybe you are facing an examination and have hired a tax professional to represent you.
Several recent developments are putting the spotlight back on what happens in those situations, from a new automatic form of penalty relief to efforts aimed at protecting taxpayers during IRS examinations and appeals.
A New Right to Automatic Relief
For years, taxpayers with a strong compliance history could potentially receive First Time Abatement when certain penalties were assessed. There was just one catch, taxpayers had to contact the IRS and request it.
Beginning in 2026, the IRS is changing that process with a new Automatic Exemption from Penalty (AEP).
Under AEP, eligible taxpayers with a history of filing and paying on time can automatically receive relief from certain failure-to-file, failure-to-pay and failure-to-deposit penalties. Instead of assessing the penalty and waiting for the taxpayer to request relief, the IRS can prevent the qualifying penalty from being assessed in the first place.
Generally, eligibility requires a history of timely filing and payment for the previous three years, or 12 consecutive quarters for quarterly filers. The new process begins with eligible 2025 tax-year returns and 2026 quarterly returns and will replace First Time Abatement for eligible original returns due January 1, 2027, or later.
That doesn’t mean penalties are disappearing. Taxpayers are still responsible for filing, paying and making required deposits on time, and AEP doesn’t apply to every taxpayer or every type of penalty. Tax and applicable interest also remain due.
What is changing is the process. For taxpayers who qualify, a one time mistake may no longer require another phone call or request to the IRS just to receive relief they were already eligible for.
Who Gets a Seat at the Table?
Another taxpayer rights issue is centered on something most people hopefully never need, an IRS appeal.
The IRS Independent Office of Appeals is intended to give taxpayers an opportunity to resolve a tax dispute through an administrative review that is separate from the IRS function that originally made the determination.
But a question has emerged around exactly who should be allowed in the room.
The proposed Strengthen Taxpayer Rights Act of 2026 would require a taxpayer’s consent before an IRS employee outside of the Independent Office of Appeals could participate in an Appeals conference.
The National Taxpayer Advocate has publicly supported the proposal, arguing that taxpayers should have a voice in whether employees from the IRS functions whose positions they are challenging participate in their Appeals conference.
For taxpayers, the idea is fairly simple: if you’re asking for an independent review of an IRS decision, you should have greater control over who participates in that review.
It is important to note that this is still a proposal, introduced in the House in March 2026 and referred to the House Committee on Ways and Means. It has not been enacted into law.
When You Hire Someone to Represent You
There is another taxpayer protection receiving attention, and this one starts with a Power of Attorney.
When a taxpayer authorizes a qualified tax professional to represent them before the IRS, that representative can communicate and work with the IRS on the taxpayer’s behalf within the authority granted.
Recently, the Texas Society of CPAs’ Federal Tax Policy Committee raised concerns about reports of IRS Revenue Agents requiring taxpayers to personally participate in civil examination interviews despite having an authorized Power of Attorney representative.
The concern comes down to a fairly simple question: if you’ve authorized someone to represent you before the IRS, when should you still be required to personally attend an interview?
Current tax law generally allows an authorized representative to appear on a taxpayer’s behalf unless the IRS takes the formal step of summoning the taxpayer. TXCPA is asking the IRS to make sure that protection is being followed consistently, with clearer guidance and better training for Revenue Agents.
Why does that matter?
Hiring a tax professional isn’t simply about having someone help organize paperwork. Representation can give taxpayers an experienced person to communicate with the IRS, understand what information is being requested and help navigate an examination on their behalf.
Knowing where those rights begin and end can make an already stressful process much easier to navigate.
Knowing Your Rights Matters
Most taxpayers will never find themselves sitting in an Appeals conference or debating who needs to attend an IRS examination. But taxpayer rights matter most when something doesn’t go according to plan.
These developments all approach that idea from a different direction. One makes certain penalty relief automatic. Another proposes giving taxpayers more control during Appeals conferences. And another is calling attention to protections that already exist when taxpayers choose professional representation.
Tax rules tell us enough about what taxpayers owe the government. Taxpayer rights help define what taxpayers should be able to expect in return.
If you receive an IRS notice, are facing a penalty or aren’t sure what your options are when dealing with the IRS, our team can help you understand the next steps and navigate the process.