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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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Foreign Penalties Tax Procedure

IRS Penalties for Late-Filed Forms 5471

The Dewees v. United States, 16-cv-01579 (D.D.C. 2017) case is a good reminder that late-filed Forms 5471 should include reasonable cause statements. These statements can be submitted under the IRS’s Delinquent International Information Return Submission Procedures to avoid penalties being assessed. The Facts and Circumstances in Dewees Dewees is a U.S. citizen who lived in […]

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Reasonable Cause Tax Procedure

Penalty Abatement for Reliance on Tax Advisor Who Made Obvious Errors

The IRS often willing to abate or remove tax penalties. To do so, taxpayers usually have to show that they acted with reasonable cause and in good faith. Relying on a competent tax professional can be one way taxpayers can make this showing. But what exactly is a competent tax professional? The court addressed this […]

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IRS Penalties Tax Procedure Tax Returns

Do You Have to Use the IRS’s Official Forms?

Do taxpayers have to use the official forms published by the IRS?  In May v. United States, No. 15-16599 (9th Cir. 2017), the court considered whether a taxpayer is subject to the listed transaction penalty if he fails to file the IRS’s reportable transaction form, but the IRS is otherwise furnished with all of the information […]

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Foreign Penalties Tax Procedure

Reckless Conduct Sufficient for FBAR Civil Tax Penalty

It is not clear as to what level of conduct justifies the imposition of the $100,000+ foreign bank account reporting (“FBAR”) civil tax penalty. In Bedrosian v. United States, No. 15-5853 (E.D. Pa. 2017), the court considered whether reckless conduct is sufficient given the facts presented in the case. The FBAR Civil Tax Penalty The […]

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IRS Penalties Tax Procedure Trust Fund Penalties

Check Signing Activity Not Sufficient for Trust Fund Penalty

The IRS will often assert trust fund recovery penalties against anyone who signs checks written on the business checking account. The court addressed this in Shaffran v. Commissioner, T.C. Memo. 2017-35, concluding that some check signing activity alone is not sufficient to impose a trust fund recovery penalty. The case provides some insight as to […]

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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. […]