First-time penalty abatement can be used when a taxpayer meets the criteria as outlined in IRM 20.1.1.3.3.2.1, First Time Abate (FTA), which include:
Filing compliance: Must have filed (or filed a valid extension for) all required returns and can’t have an outstanding request for a return from the IRS.
Payment compliance: Must have paid or arranged to pay all tax due (can be in an installment agreement if the payments are current).
Clean penalty history: Has no prior penalties (except