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A Graev Matter: § 6751

In Defenses, Penalties by Zach MontgomeryLeave a Comment

According to the Internal Revenue Code, the IRS must follow certain specific procedures when assessing penalties, such as approval in writing by the immediate supervisor of the individual making the penalty determination. The IRS must comply with these procedures for the Tax Court to uphold the penalties. Supreme Court Justice Kavanaugh previously held: “A court’s assessment of an agency’s compliance …

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The Accuracy-Related Penalty and the Reasonable Cause Defense

In Defenses, Penalties by Jason Freeman1 Comment

The Tax Court, in Kauffman v. Commissioner, (2017) TC Memo 2017-38, recently addressed a commonly-encountered issue in tax litigation: The application of the reasonable cause defense to the IRS’s assertion of the accuracy-related negligence penalty.  The case, while not breaking new ground, stands as a reminder of the limits of the reasonable cause defense and the need to present evidence …

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Litigating FBAR Penalties: The Burden of Proof and the Meaning of Willfulness

In Bank Secrecy Act, Defenses, FBAR, Tax Litigation, White Collar, Willfulness by Jason FreemanLeave a Comment

The recent case of United States v. Bohanec, 2016 U.S. Dist. LEXIS 170149 (Dec. 8, 2016) provides the latest glimpse into the world of FBAR penalty litigation. Among other things, the case looks at two interesting and important procedural issues: the meaning of willfulness and the burden of proof necessary to prove it. In Bohanec, the government asserted a penalty …

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Litigating IRS Penalties

In Defenses, Penalties by Jason FreemanLeave a Comment

Litigating IRS tax penalties is a central part of practicing tax law and representing taxpayers.  The Taxpayer Advocate, in her last Annual Report to Congress, provided a studied summary of reported cases during the 2015 fiscal year litigating the failure-to-file penalty under § 6651(a)(1), the failure-to-pay penalty under § 6651(a)(2), and the failure to pay estimated tax penalty under § …