If a taxpayer has penalties due from filing and paying late his 2010 Form 1040 tax return, then what does the three prior year, clean compliance history part of the first time abate rule mean? In other words, in order for the taxpayer to qualify for a first time abate, does it mean no "significant" penalties occurred in relation to the taxpayer's Form 1040 in 2007, 2008, and 2009?
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Last edited by Tax Sleuth; 04-14-2014, 01:13 PM. -
Answer
Yes, it does mean that you have to look back to the three prior years before the faulty return to determine if the taxpayer has had any "significant" penalties. In this case, you do have to look at the Form 1040 returns for 2007, 2008, and 2009.
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