I was killed in a nfz in a sector where I had "admired" standing and when I died it didn't give me the option to reduce their standing, and they weren't attacked by the station guards. So my question is does the person being attacked have to have higher faction standing than the attacker for the attacker to lose faction standing and get attacked?

If you're killed in a NFZ the Strike Force attacks, standing doesn't factor into it.

I see well what would my faction standing have to be to make the attacking player kos permanently?

What faction was the station you were killed at? Was it in Greyspace?

If you have Admired or POS at the time of death, and the faction in question is not Corvus, then you get to penalize them. The size of the penalty depends on the faction in question and possibly on how high your own standing is. No amount of standing is enough to guarantee that they will be dropped all the way to KOS (or even Hated) if they have high standing (not because their high standing lessens the penalty, but simply because it means they have plenty of faction to lose). The worst case would be if they killed somebody who was POS within a nation's jurisdiction (stations owned by minor factions within UIT space don't count as UIT monitored). That carries a pretty hefty penalty, but if they're also POS I think they'd only drop to Neutral. Might be Disliked though, not sure. If they were only Respected, then they'd make it all the way to KOS.

Do be aware that if you return fire within the NFZ and hit anybody, you will also become temporarily kill on sight, and if you die while temp-KOS, you do not get the option to penalize them, since you aren't Admired at the time of death (even though you get it back right after you die).

And in case I wasn't clear in the first paragraph, Corvus does not do permanent penalties, only temp-KOS. All of the other factions do, however.

It was in arta, uit mining while in a nfz

And yes I learned that lesson while I was baited into returning fire in a itani nfz and my standing dropped considerably. This was after the guy was station camping which I think is pretty cheap luckily in have a ship to deal with that now. Was just curious how I can use faction standing toy advantage

Also I assume these nfz kos penalties only occur in capital systems?

Stations all have a ~1km radius sphere surrounding them which will make you KOS with the faction the station belongs to for 15 minutes if you destroy another ship inside that sphere. This is true of almost all stations, except maybe the hidden capital shipyards and three conquerable stations. Most factions will also subtract standing from you for killing a pilot that they like in monitored space. This is where the kill-forgiveness comes in. Seasoned pirates tend to know the ins and outs of the faction system / nfz better than anyone else since they are more frequently on the margins of such systems.

Thanks for the correction.

The NFZ at some Corvus stations seem to be much less than 1km (Odia J-9 for instance) and the XX station at Sedina L-2 is about 2.3 km if I'm not mistaken.