“Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.”
- Thirteenth Amendment to the United States Constitution -
CPA Kip Dillinger writing for Tax Notes says that a war is brewing between tax preparers [...]
Tags: IRS Penalties · IRS procedure · Regulation of Tax Preparers
From Paul Caron:
Bret Wells (Houston) has posted Adopting the More Likely Than Not Standard for Tax Returns, 127 Tax Notes 451 (April 26, 2010), on SSRN. Here is part of the abstract:
Under current law, a taxpayer may generally take a tax return position without penalty or disclosure if there is substantial authority that the position [...]
Tags: IRS Audits · IRS Penalties · Regulation of Tax Preparers
According to Sam Young of Tax Analysts several tax professionals have expressed concern over the Tax Court’s recent decision in Canal Corporation v. Commissioner:Â
In an e-mail to Tax Analysts, Blake D. Rubin, Andrea M. Whiteway, and Jon Finkelstein of McDermott Will & Emery LLP argued that the court misconstrued section 6662 in upholding the accuracy-related penalty [...]
Tags: Court Cases · IRS Penalties
In Canal Corp. v. Commissioner, 135 T.C. No. 9 (Aug. 5, 2010), the Tax Court found a corporation liable for a $37 million accuracy-related penalty under §6662(a) even though it had obtained a tax opinion from Price Waterhouse Coopers (PWC).
Judge Diane Kroupa issued a scathing rebuke of PWC which should be viewed as a shot across the bow of all [...]
Tags: Court Cases · Ethics · IRS Penalties
Paul Caron reported last week that the Treasury Inspector General for Tax Administration (TIGTA) has released Accuracy-Related Penalties Are Seldom Considered Properly During Correspondence Audits (2010-30-059) in which it states (emphasis is mine):
The IRS must take additional steps to ensure that accuracy-related penalties are appropriately considered when assessing correspondence audits….
A TIGTA review of 229 correspondence audits closed in [...]
Tags: IRS Penalties
Everyone knows about the sweetheart deal the IRS gave it’s current boss, Secretary of Treasury Timothy Geithner.
Before he became Secretary of Treasury, Geithner, a financial wunderkind, failed to comply with federal tax laws and was assessed additional taxes, interest and penalties. Geithner was later relieved of the penalties based, at least in part, on his contention that his tax [...]
Tags: Court Cases · IRS Penalties
The Tax Court has rejected a taxpayer’s use of the so-called Geithner Defense holding that a reliance on TurboTax software does not warrant relief from IRS penalties:
We do not accept petitioners’ misuse of TurboTax, even if unintentional or accidental, as a defense to the penalties on the basis of the facts presented. …Â At trial Ms. Lam did [...]
Tags: IRS Penalties · tax court
From the TaxProf, Paul Caron:
Congressmen John Carter (R-TX) and Lynn Westmoreland (R-GA) yesterday introduced the Geithner Penalty Waiver Act, requiring that the IRS assess the same penalty against U.S. taxpayers that came forward in the UBS tax fraud investigation as paid by Treasury Secretary Timothy Geithner for failing to pay taxes on his IMF income — [...]
Tags: IRS Penalties · Legislative Watch
Section 4.10.63.5.3 of the Internal Revenue Manual is titled Reliance on Representative and/or Return Preparer and provides in part that,
In considering the failure to file penalty, the United States Supreme Court has held that the fact that a taxpayer relies on an attorney to file a timely tax return does not relieve the taxpayer of the [...]
Tags: IRS Penalties
There are no more extensions.
In addition to previously extended corporate (1120) and trust (1041) tax returns, S Corporation (1120S) and partnership (1065) tax returns are due today.
Most IRS late filing penalties are calculated as a percentage of the unpaid tax shown on the return.
But S Corporations and partnerships don’t pay tax so does that mean taxpayers can file those tax [...]
Tags: IRS Penalties
Wall Street Journal – Taxes Blog
