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Tax Liability Tax Penalties Tax Returns

Kilpatrick

Around the Country: Recent Cases in Tax Penalty Abatement

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Introduction – What Is Tax Penalty Abatement? Audits can be an incredibly frustrating ordeal. From initial contact with tax authorities to digging up old financial records to possibly increasing tax liability, there are...more

Fox Rothschild LLP

IRS to Focus on High-Income Earners Who Have Not Filed Tax Returns Since 2017

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The IRS expects to send out over 125,000 collection letters to high-income taxpayers who did not file one or more federal income tax returns between 2017 and 2021. As part of the new collection initiative, approximately...more

Holland & Knight LLP

Tax Court: IRS Lacks Authority to Assess Certain Foreign Information Return Penalties

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The U.S. Tax Court (USTC) on April 3, 2023, issued its opinion in Alon Farhy v. Commissioner, which held that the IRS lacks authority to assess certain foreign-related information return penalties pursuant to Section...more

Freeman Law

IRS Lacks Statutory Authority to Assess Certain Form 5471 Penalties

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The recent Tax Court decision in Farhy demonstrates that clever and novel arguments can carry the day in complex tax litigation matters.  In that case, the taxpayer stipulated that he:  (1) had Form 5471 filing obligations...more

Bilzin Sumberg

Playing Battleship with the IRS: Assessing the Damages

Bilzin Sumberg on

In a prior post, I discussed the dangers of playing Battleship with the IRS. Recently, taxpayers made a move and scored a hit with the Tax Court’s  recently issued decision in Alon Farhy v. Commissioner, 160 T.C. No. 6 (April...more

Cadwalader, Wickersham & Taft LLP

Supreme Court Hands Taxpayers a Victory in FBAR Penalty Case

Taxpayers recently won a significant victory at the Supreme Court in a penalty case involving a non-willful failure to file a Report of Foreign Bank and Financial Accounts (“FBAR”) under the Bank Secrecy Act (the “BSA”)....more

Polsinelli

Major Win For Taxpayers: SCOTUS Limits FBAR Penalties to Per Report Not Per Financial Account

Polsinelli on

After years of litigation, the United States Supreme Court, in Bittner v. United States, 598 U.S. ____ (2023), determined that the penalty for a non-willful failure to file a Report of Foreign Bank and Financial Accounts...more

Freeman Law

Tax Court in Brief | Mulu v. Comm'r | Accuracy-Related Penalty and No Reasonable-Cause Excuse

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Summary: In this non-precedential opinion (see section 7463(b)), the Tax Court addresses whether or not to uphold an accuracy-related penalty assessed to taxpayer, Ashenafi Getachew Mulu (Mulu). Mulu hired David...more

Farella Braun + Martel LLP

Federal and California Taxpayer Relief: Reprieve From Wet Winter Weather

2023 started California off with weather that escapes recent memory. Rain, snow, and surf seemed unrelenting for the first two weeks of January. While this spell of winter storms has brought snow to our slopes and refilled...more

Freeman Law

Tax Court in Brief | Decrescenzo v. Comm’r | Challenge to Notice of Deficiency and Penalties for Frivolous Arguments

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Taxpayer and petitioner, Joseph Decrescenzo (“Petitioner”) belatedly filed returns of income for seven years at issue (2007-2013). The IRS determined various differing deficiencies as to the years at issue and notified...more

Freeman Law

Tax Court in Brief | Mining v. Comm’r | Deficiency Determination and Penalties for Underreporting and Frivolous Arguments

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Summary: During 2016, Ryan Mining (Mining) was employed by Tasco, Inc. (Tasco), and it issued him Form W–2, Wage and Tax Statement, reporting wages of $116,000, no federal income tax withheld, Social Security tax withheld of...more

Freeman Law

Tax Court in Brief | Castro v. Comm’r | IRS Compliance with Written Supervisory Approval Requirement for Accuracy-Related...

Freeman Law on

Short Summary: After an examination by a Revenue Agent, the IRS issued to the taxpayers a notice of determination of income tax deficiencies, a tax addition, and an accuracy-related penalty. In closing the examination, the...more

Freeman Law

Section 6751(b) Penalty Approval Circuit Split

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Eleventh Circuit Sides with Ninth Circuit on Section 6751(b) Circuit Split - Introduction: Section 6751(b) and the Timing of Supervisory Approval of a Penalty - The Eleventh Circuit’s decision in Kroner v. Commissioner,...more

Miller Canfield

IRS Provides Dramatic Penalty Relief

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​​​​​​​On Aug. 24, 2022, the IRS released Notice 2022-36 providing automatic relief from failure to file penalties for the 2019 and 2020 tax years for a significant number of individuals and businesses that were late in...more

Latham & Watkins LLP

IRS Announces Penalty Relief for 2019, 2020 Tax Years

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Taxpayers must act quickly to determine if further action is necessary to obtain relief. Delinquent returns must be filed on or before September 30, 2022. ...more

Freeman Law

How to Successfully Fight the Section 6721(e) Intentional Disregard Penalty

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Section 6721 provides the IRS with authority to impose civil penalties against taxpayer-employers who fail to timely file correct information returns (e.g., Forms W-2/W-3 and Forms 940/941). Under section 6721’s three-tiered...more

Gray Reed

Asking the IRS to Abate Penalties

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All kinds of penalties are being assessed by the Internal Revenue Service (IRS) against taxpayers, and more can be expected in the future.  In 1954 there were 13 penalties in the Internal Revenue Code, and now there are more...more

Gray Reed

Non-Willful FBAR Penalties Will be Much Higher in the Fifth Circuit

Gray Reed on

On November 30, 2021, the Fifth Circuit parted ways with the taxpayer friendly decision of the Ninth Circuit that non-willful penalties are capped at $10,000 per FBAR filing instead of the $10,000 per unreported bank account...more

Freeman Law

Section 6700 Penalties – False or Fraudulent Statements

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Promoting abusive tax shelters. Taxpayers and tax return preparers should be aware of the various penalties that exist and can be assessed for certain actions (or nonactions). One such action includes promoting an abusive tax...more

Freeman Law

Failure to Report Foreign Trust Results in 35% Penalty Against the Owner/Beneficiary

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The 35% penalty under I.R.C. section 6677 for failing to report a distribution from a foreign trust applies against a person who is both the beneficiary and grantor/owner of a foreign trust. At least, that is now the rule...more

Freeman Law

Qualified Amended Returns: How to Avoid Tax Penalties

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A “qualified amended return” is an amended tax return that, if properly filed before a taxpayer is “on the IRS’s radar,” protects a taxpayer against accuracy-related penalties—in layman’s terms, it is a get-out-of-jail-free...more

Freeman Law

How to Designate an IRS Employment Tax Payment

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When a taxpayer makes a voluntary payment to the IRS, the taxpayer has the option to designate the application of the payment to certain periods and/or taxes. For example, if a corporation owes federal employment taxes and...more

Freeman Law

The Art of the Tax Disclosure: How to Avoid Tax Penalties By Disclosing a Return Position

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There are at least three questions when it comes to IRS tax disclosures: (1) Should a taxpayer disclose; (2) How should a taxpayer disclose; and (3) How much detail should be disclosed? Should a taxpayer simply append a...more

Bilzin Sumberg

Emily S. Wilson et al. v. United States: Playing Battleship with the Internal Revenue Service

Bilzin Sumberg on

As many readers may know, Joseph Wilson (“Mr. Wilson”) was the settlor, tax owner, and beneficiary of a foreign trust. By virtue thereof, Mr. Wilson, as a U.S. citizen, had the requirement to file IRS Form 3520 and IRS Form...more

Gray Reed

Tips for Negotiating with the IRS

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While dealing with the IRS generally involves submitting documents or legal authority to support a client’s position, in most cases the element of negotiating is present.  Negotiating becomes particularly important in dealing...more

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