AICPA Seeks Penalty Relief for Estates, Trusts
The accounting group asks the IRS to waive 2026 estimated tax penalties while guidance on a new itemized deduction limit is pending.
Updated on Nov. 6, 2026 in Taxes
The American Institute of CPAs has asked the IRS to waive 2026 estimated tax underpayment penalties for estates and non-grantor trusts. The request centers on a new itemized deduction limitation enacted under the One Big Beautiful Bill Act, which has not yet been clarified for estates and trusts.
Why it matters
Fiduciaries for calendar-year estates and trusts have already made three estimated tax payments for 2026 without clear guidance on how the new limitation applies. The request seeks relief from underpayment penalties that could result from that uncertainty.
The AICPA request is a professional association submission to the IRS concerning estimated tax penalties for 2026. Calendar-year estates and trusts have made three estimated payments, and the next obligation is due January 15, 2027, but no federal guidance yet addresses the new limitation.
The players
American Institute of CPAs (AICPA)
The AICPA is the national professional association of certified public accountants in the United States, which has previously pressed Treasury and the IRS for guidance on tax rules affecting estates and trusts.
Internal Revenue Service (IRS)
The IRS is the federal agency responsible for administering and enforcing U.S. tax law, including estimated tax penalties and the penalty relief the AICPA has requested.
The details
The AICPA letter asks for waiver of underpayment penalties to the extent they result from applying the new limitation to deductions such as the income distribution deduction, charitable deduction, and certain administration expenses. The group cited prior IRS penalty relief after major tax changes, including the Tax Reform Act of 1986, the Tax Cuts and Jobs Act, and corporate alternative minimum tax rules.
Timeline
Tax years beginning after December 31, 2025: new itemized deduction limitation takes effect.
2026: fiduciaries make three estimated tax payments without clear guidance.
January 15, 2027: deadline for 2026 estimated tax obligations.
Historical Precedent
The AICPA is asking the IRS to follow its earlier practice of providing estimated tax penalty relief after major law changes, citing the Tax Cuts and Jobs Act as an example. The request would extend that approach to the new itemized deduction limitation affecting estates and trusts.
Fiduciaries of estates and non-grantor trusts face possible underpayment penalties if the new limitation changes their required estimated payments. Until the IRS issues guidance or grants relief, those fiduciaries must decide how to calculate their remaining 2026 payments without clear rules.
The takeaway
Fiduciaries of estates and trusts should track IRS guidance on the new deduction limitation closely and plan for the January 15, 2027 deadline. Whether penalty relief is granted will depend on the agency's response to the AICPA request.
What happens next
January 15, 2027 is the deadline for 2026 estimated tax obligations, which will be the next key date for affected fiduciaries.
Further reading
For related coverage, see Taxes under personal finance news in the United States.
