IRS and Mexico's SAT unveil new tax penalty reforms

The U.S. Internal Revenue Service announced an Automatic Exemption from Penalty (AEP) program that will automatically waive certain late‑filing and late‑payment penalties for taxpayers who have a clean filing history. The new measure replaces the long‑standing First Time Abate program and will apply to original 2025 returns and quarterly filings for 2026, aiming to simplify compliance and reduce administrative work.

Mexico’s tax authority, the Servicio de Administración Tributaria (SAT), warned that starting in 2027 it will impose fines of up to 11,540 pesos on taxpayers who fail to keep their Buzón Tributario service active or do not maintain up‑to‑date contact information. The deadline to correct any issues is 31 December 2026, after which penalties ranging from 3,850 to 11,540 pesos could be assessed.