Client formed new entity but claimed no activity. After further review, there was activity and ended up filing initial Form 1065 four months late. It was a 2019 return.
Received late filing penalty notice and requested relief under Rev Proc 84-35 as all partners filed timely.
Notice today said
We approved your request to remove the penalties. However, we granted penalty relief only because this filing was the first time you were required to file a return. This type of penalty removal is only available one time. We'll base our decision to remove any future penalties on reasonable cause criteria.
My question is... Does this mean they have used up their First Time Abatement Penalty Relief or is there some other First time relief. The intent of using 84-35 was to avoid wasting the first time abatement. The penalty was $2,460 so it was not that big of a deal. Why would they deny 84-35?