Income Taxes, Tax Liability, Tax Penalties

Mixed Opinions on Penalty Relief for Corporate AMT Taxpayers

Cadwalader, Wickersham & Taft LLP on 5/29/2024

On April 15, the IRS released Notice 2024-33 (the “Notice”), offering limited relief from tax penalties for underpaying estimated income taxes arising from a corporation’s alternative minimum tax (“AMT”). The AMT imposes a...more

Around the Country: Recent Cases in Tax Penalty Abatement

Kilpatrick on 5/24/2024

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

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

Fox Rothschild LLP on 3/4/2024

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

IRS Sanctioned for Bad Faith on Supervisory Approval of Penalties While Proposed Regulations on the same Issue are Pending

Gray Reed on 9/6/2023

A hearing is scheduled for September 11, 2023 for interested persons and organizations to provide testimony on proposed regulations on the timing and approval process for penalties. Section 6751(b) provides that...more

A Remittance to the IRS May Not Always Operate as Intended

Miller Canfield on 5/8/2023

A taxpayer against whom the IRS determines—not "assesses" but "determines"—a tax deficiency must decide whether to make a remittance to the IRS and if so, whether the remittance is to be treated as a "deposit" or as a...more

IRS Lacks Statutory Authority to Assess Certain Form 5471 Penalties

Freeman Law on 4/13/2023

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

Playing Battleship with the IRS: Assessing the Damages

Bilzin Sumberg on 4/7/2023

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

Supreme Court Hands Taxpayers a Victory in FBAR Penalty Case

Cadwalader, Wickersham & Taft LLP on 3/22/2023

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

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

Polsinelli on 3/14/2023

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

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

Freeman Law on 1/30/2023

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

Federal and California Taxpayer Relief: Reprieve From Wet Winter Weather

Farella Braun + Martel LLP on 1/25/2023

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

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

Freeman Law on 1/16/2023

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

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

Freeman Law on 1/9/2023

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

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

Freeman Law on 1/4/2023

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

Section 6751(b) Penalty Approval Circuit Split

Freeman Law on 12/14/2022

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

IRS Provides Dramatic Penalty Relief

Miller Canfield on 9/2/2022

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

[Webinar] The Freeman Law International Tax Symposium - October 20th - 21st, 9:00 am - 5:00 pm CST

Freeman Law on 8/31/2022

Join leading tax experts from across the globe, as we discuss tax trends that are reshaping international taxation - AN EXPERIENCE UNLIKE ANY OTHER - Find yourself on the cutting-edge of international tax law, with...more

IRS Announces Penalty Relief for 2019, 2020 Tax Years

Latham & Watkins LLP on 8/29/2022

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

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

Freeman Law on 7/26/2022

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

IRS Penalty Denied Because of Poor Penmanship

Gray Reed on 7/14/2022

Many people, myself included, can sometimes be accused of poor penmanship. As our paperwork becomes more and more electronic, we write less and less down with pen and paper. However, a recent decision from the tax court may...more

IRS Tax Penalties and the Tax Professional Reliance Defense

Freeman Law on 6/1/2022

IRS Tax Penalties and the Tax Professional Reliance Defense - No one wants to pay federal taxes. And this truism applies more so with respect to federal tax penalties. Accordingly, clients often call upon their tax...more

An Update on Section 6751 Penalties

McDermott Will & Emery on 3/24/2022

Tax penalties are always a hot topic here. The Internal Revenue Service (IRS) has a large arsenal when it comes to grounds for asserting penalties on income tax deficiencies, ranging from the common 20% penalty under Internal...more

IRS Fails to Follow its Own Procedures and IRS Counsel Claims Supervisory Approval Still Valid

Gray Reed on 2/10/2022

Although the government bears the burden of production for penalties, this often involves nothing more than showing that the penalties were properly assessed. Penalty relief is usually only given when the taxpayer can marshal...more

Asking the IRS to Abate Penalties

Gray Reed on 1/6/2022

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

Recent Tax Court Case Outlines Factors Taxpayers can use to Avoid Negligence Penalties

Gray Reed on 12/10/2021

The IRS is vigorously litigating cases involving conservation easements they believe are abusive. One such case was Plateau Holdings, LLC v. Comm’r, T.C. Memo 2020-93 (Plateau I). In that case the Tax Court denied the entire...more

Income Taxes › Tax Liability › Tax Penalties

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