BobKamman
Level 15

That's not the usual return where penalty relief is requested, nor is an audit the usual place where it is brought up.  But I don't see anything preventing it.  Are you working with a real auditor, or is this just faceless correspondence from a Service Center?

https://www.irs.gov/payments/penalty-relief-due-to-first-time-abate-or-other-administrative-waiver