I took a class through Canopy and CPAAcademy and I did not realize you could go back in time as far back as 1990 to request transcripts on clients to see if they might qualify for first time abatement penalty relief, and that this can be done every 3 years if no penalties assessed and those years were clean.
My question is this: since the IRS will not give refunds for any amounts over the 3 year statute of limitations, I am wondering if this statute also applies to penalty abatement? If not, I’m guessing the exercise of asking for the abatement would be to reduce a current tax liability situation... but what if the taxpayer does not have a tax liability situation? Can they request that the penalties relived be applied to future years liability (e.g. a small business owner that didn’t estimated tax payments for 2016 and will owe for 2017 or a taxpayer who is under withheld for 2016)? Can they apply those abatements to these liabilities although a more current liability?