Congress Makes Changes to Tax Code in Trade Preferences Act
The Trade Preferences Extension Act of 2015 contains tax provisions in addition to the trade measures that were the focus of the bill.
Penalties
IRS Grants Penalty Relief to Taxpayers Who Received Incorrect Health Care Forms
To ease the filing burden for taxpayers who received late or incorrect Forms 1095-A, the IRS announced that it will provide penalty relief for taxpayers.
Former Partner Liable for Trust Fund Penalty
A taxpayer who asserted he was no longer a partner in a business during the periods at issue was nevertheless held to be a responsible person and liable for the 100% penalty for failure to pay over withheld employment taxes.
Taxpayers Get Penalty Relief for Incorrect Premium Tax Credit Advance Payments
The IRS will provide automatic penalty relief for taxpayers who, when they reconcile advance payments of the premium tax credit they received for 2014 to the amount of the credit they are entitled to on their income tax returns, find they owe additional tax.
Sec. 6707 Material Adviser Penalty Applies on a Transaction-by-Transaction Basis
The IRS issued final regulations under Sec. 6707, which imposes a large penalty on any material adviser who fails to file a return required under Sec. 6111(a) disclosing a reportable transaction or who files a false or incomplete return.
Regulations Provide Guidance on Sec. 6707 Material Adviser Penalty
The IRS issued final regulations under Sec. 6707, which imposes a large penalty on any material adviser who fails to file a return required under Sec. 6111(a) disclosing a reportable transaction or who files a false or incomplete return.
Taxpayer Did Not Have Fraudulent Intent
The Tax Court held that a taxpayer who used an “agent-principal” scheme to avoid paying taxes on income from his business was not liable for a civil fraud penalty because the IRS had failed to prove that the taxpayer had fraudulent intent.
Valuation-Misstatement Penalty Applies to Tax Shelter Transactions
The Supreme Court held in that the Sec. 6662(b)(3) penalty for tax underpayments attributable to valuation misstatements applies to an underpayment resulting from a basis-inflating transaction that is disregarded for a lack of economic substance.
Taxpayer Did Not Have Fraudulent Intent
The Tax Court held that a taxpayer who used an “agent-principal” scheme to avoid paying taxes on income from his business was not liable for a civil fraud penalty because the IRS had failed to prove that the taxpayer had fraudulent intent.
TIGTA Report Studies Assessment and Enforcement of Sec. 6694 Paid Preparer Penalties
TIGTA studied how effective the IRS is in using the requirements and penalty regime that apply to tax preparers. The TIGTA study attempted to determine whether controls are in place to ensure that the IRS effectively enforces and applies penalties to paid preparers as required by Sec. 6694.
Supreme Court Resolves Circuit Split on 40% Gross Valuation Misstatement Penalty
The Supreme Court held that the 40% penalty for a gross valuation misstatement applied when the partnerships at issue had been determined to be shams that lacked economic substance, and, as a result, the partners’ outside basis in the partnerships was zero.
For Penalty Calculation, Amount of Tax Shown on Return Reduced by Credits, Tax Court Holds
The Tax Court held that the amount of tax shown on the taxpayers’ return was reduced by refundable credits, but not below zero, for purposes of calculating the Sec. 6662(a) accuracy-related penalty.
IRS Tightens Penalty Relief
Recent IRS actions suggest a movement away from granting penalty relief. Recent budget cuts, furloughs, and negative press have exacerbated the trend by significantly decreasing IRS resources, resulting in slower responses to taxpayer inquiries.
IRS Provides Details About Postponed Employer Health Care Penalty and Information Reporting
The IRS made official the postponement of the large-employer health care penalty and certain information reporting rules that had been informally announced July 2.
Treasury Postpones Employer Health Care Penalty, Information Reporting for One Year
Large employers who fail to provide minimum health coverage for employees will not be subject to the shared-responsibility penalty until 2015 after Treasury announced that it would delay certain provisions of 2010’s health care legislation.
Using the First-Time Penalty Abatement Waiver
This article explores the IRS first-time penalty abatement waiver and explains how to help clients remove certain penalties using it.
Tax Court Reverses Its Position on Valuation Misstatement Penalty; Supreme Court Agrees to Hear Case on the Issue
The Tax Court held that a taxpayer may not avoid application of the gross valuation misstatement penalty by conceding that adjustments made in an IRS FPAA notice were correct on grounds unrelated to valuation or basis.
Prop. Regs. Allow Material Advisers to Request Extension
The IRS issued proposed regulations governing the penalty for failure of material advisers to provide lists of advisees in reportable transactions.
Incorrect Expert Advice About Estate Return Filing Deadline Does Not Excuse Penalty
An executor who relied on his accountant’s mistaken advice that he had obtained a one-year extension of the filing due date for Form 706 was nonetheless liable for a large late-filing penalty.
Expanded Due-Diligence Requirements for 2012 Returns
This item discusses Form 8867, Paid Preparer’s Earned Income Credit Checklist, extensive new due-diligence requirements for wage earners, and Schedule C, Profit or Loss From Business
