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Filing & Payment Penalties Tax Procedure

Court Rejects the ‘Taking All Necessary Steps’ Defense to Penalties

If you take all of the steps to prepare and remit a tax return to the IRS except for placing it in the mail, is this sufficient to avoid a failure to timely file penalty?  There is case law suggesting that it may be in some circumstances.  The U.S. Tax Court recently addressed this in […]

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IRS Audits Tax Procedure

Form 2848 Must Specifically List Information Tax Returns

The IRS can generally disclose a taxpayer’s tax information with a representative that is designated by the taxpayer on a Form 2848, Power of Attorney and Designation of Representative.  This covers all forms included with the taxpayer’s tax return as long as the type of tax return is listed on the Form 2848.  This raises […]

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Reasonable Cause Tax Procedure

Relying on Tax Attorney for Filing Deadline is Reasonable Cause

It is clear that one cannot rely on a tax attorney to file a tax return for purposes of removing penalties if the return is not filed.  But can you rely on an attorney if the attorney provides advice as to the wrong date for filing?  The court addresses this in Estate of Hake v. […]

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Filing & Payment Penalties Reasonable Cause Tax Procedure

Proof of Cash on Hand to Abate Failure to Pay Penalty

The failure to pay penalty is one of the most commonly assessed penalties. The penalty does not apply and can be abated or removed if the taxpayer can establish that the failure to pay is due to reasonable cause and not to willful neglect.  But how do you establish reasonable cause?  In C1 Design Group, LLC […]

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IRS Penalties Reasonable Cause Tax Procedure

Court Revisits Reasonable Cause Abating Penalties

The U.S. Supreme Court has made it clear that taxpayers cannot avoid penalties by blindly rely on tax attorneys to file tax returns and make tax payments. These situations are unfortunate. The court in Specht v. United States, No. 15-3095 (6th Cir. 2016) highlights one way that taxpayers may be able to avoid the bright […]

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IRS Penalties Reasonable Cause Tax Procedure

What Facts are Needed to Abate Penalties?

The IRS is authorized to abate penalties for reasonable cause. There is no set of standard facts or factors that show reasonable cause. Taxpayers have made various arguments, with the IRS and courts rejecting most of them. How bad does life have to be for there to be reasonable cause? The court addresses this in […]

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IRS Penalties Reasonable Cause Tax Procedure

Reasonable Cause Defense for Penalty Waives Privilege

In Eaton Corporation & Subsidiaries v. Commissioner, the U.S. Tax Court concluded that raising the reasonable cause/good faith defense to tax penalties waived the work product, attorney-client, and federal tax practitioner privileges. This is a serious issue that has to be considered when submitting penalty abatement requests based on a reasonable cause defense. APA (Advance […]