Attorney-at-Law

THE HIDDEN – PART DEUX

In Uncategorized on 12/12/2017 at 23:56

I promised y’all the second part of today’s hidden matters, and here’s CSTJ Lewis (“His Name is His Fame”) Carluzzo with the story of Kenneth E. Levinson, Docket No. 2003-17S, filed 12/12/17, a designated hitter off-the-bench.

Ken’s tale is simple. He didn’t bother including his IRA distribution, his Social Security, or a taxable dividend as income, although he listed his IRA distribution and his Social Security in the appropriate boxes on his return.

Ken claims he thought he rolled his IRA, and so neither his IRA draw nor his Social Security was taxable, except he didn’t and they were.

Apparently Ken was over 59-1/2 but under 70-1/2 during the year at issue, so MRD was off the table.

Ken doesn’t fight over the taxable dividend, but IRS had enough evidence to sustain that part of the deficiency, so that CSTJ Lew doesn’t need to go to “abandoned” to sustain it.

CSTJ Lew gives IRS the deficiency, as there’s no defense. Ken doesn’t show for the trial, but claims purity of heart to avoid the substantial understatement chop.

But IRS is missing the Boss Hoss signoff therefor.

“Respondent, of course, bears the burden of production with respect to the imposition of the penalty, see sec. 7491(c), and that burden includes not only establishing the amount of the underpayment but satisfying a procedural requirement that the imposition of the penalty was approved in writing by the direct supervisor of the Internal Revenue Service employee who first ‘determined’ to assess it. See sec. 6751(b)(1). No such writing has been introduced into evidence in this case. Nevertheless, relying upon an exception to the general requirement of written approval, respondent argues that the requirement is not applicable because the penalty was ‘automatically calculated through electronic means’. Sec. 6751(b)(2)(B). We’re not so sure that respondent is correctly construing that exception, however, we need not reach the point. Assuming without finding that respondent has met his burden of production pursuant to section 7491(c), we find that petitioner had reasonable cause and acted in good faith with respect to the underpayment of tax as claimed in his statement, which is the only evidence in the record on the point. He is therefore not liable for the penalty. See sec. 6664(c).” Order, transcript, at pp. 8-9.

The hidden calculator? I’ll give IRS counsel a Taishoff “good try, second class.”

 

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